Quote:
Originally Posted by BadNick
Call it regulation if you want to use that word, I see "honest disclosure" being the most important component. If the brokers/investment houses were required to disclose the extent of their leveraging, then potential investors could weigh the risks and invest accordingly, or not, depends on how much you want to gamble for the potential return.
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I tend to agree. Honest disclosure is at the root of investors (or consumers) making informed decisions. Short of making honest disclosure a requirement, I think investors faced with a choice between honest disclosure and no honest disclosure will pick honest disclosure. So when there is an informed investor there is not even a need to make honest disclosure a "requirement" because those seeking investors will voluntarily provide honest disclosure to obtain investment. If "regulators" want to try and make the market idiot proof they can put in "requirements" all day long based on what an informed investor would look for - but at the end of the day no "requirement" will protect anyone from dishonesty or even incompetence. Caveat emptor - that is the best market regulator.