From: dlv@bwalk.dm.com (Dr.Dimitri Vulis KOTM)
Date: Sun, 8 Jun 1997 04:00:45 +0800
To: cypherpunks@toad.com
Subject: Re: Responses to "Spam costs and questions" (long)
In-Reply-To: <199706071754.MAA01524@manifold.algebra.com>
Message-ID: <8TZX8D18w165w@bwalk.dm.com>
MIME-Version: 1.0
Content-Type: text/plain



ichudov@algebra.com (Igor Chudov @ home) writes:
> There is a lot of commercial compelled speech. For example,
> mutual funds must say that past performance is not a guarantee
> of future results.
>
> Do you find this kind of compelled speech unconstitutional?

(Is Black Unicorn reading this?)

The purpose of the securities laws is not to protect the small investor
(who gets fucked very thoroughly, thank you :-) but the large financial
services firms with political connections.

For example the requirement to put out the red herring for a non-trivial
IPO is there not to protect the investors who buy in on the IPO, but to
ensure that the syndicate that underwrites the IPO gets their 2+%.

Ditto for the entire legal framework, including the U.S. Constitution and
any other country's legal framework - its goal is to protect the
(economic) interests of the ruling class, and whatever serves those
interests is "constitutional". Inasmuch as free speech on the Internet
threatens the murderous fascist dictatorship in Washington, DC, any
restrictions on free speech are therefore "constitutional".

You remind me, Igor, of a recent story I read in a paper which I already
threw away, so I'll reconstruct it from memory, probably with mistakes:

* a few folks from Long Island, not NASD registered,published an "investment
  advice" newsletter, distributed over the Internet and fax. Subscriptions
  cost >$1K/year. It was called something like "The Small-Cap Equity
  Speculator" (not exactly, my apologies, but "speculation" was definitely
  in the title)

* Among the many penny stocks they discussed was some kind of a motorcycle
  manufacturer, whose name I forgot too. The newsletter recommended a buy
  based on their fundamentals analysis and potential sales.

* Some of the folks who published the newsletter had a long position in
  the stock, which they apparently bought months before the recommendation
  for (gasp) $2,000 (two thousand dollars).

* The newsletter had a disclaimer that the authors may hold positions in
  the stocks they're discussing [surprise!]

* The motorcycle stock fell in price, and the readers who bet on it lost money
  - as did, I presume, the newsletter publishers.  Some readers complained to
  the SEC, who's now trying to jail/fine the newsletter publishers.

* I no longer have the paper, and it wasn't terribly clear, but it sounded
  like SEC was unhappy that
   a) they were trying to drive up the price of the stock they were long
      (with the intent to sell? :-)
   b) they incorrectly analyzed the fundamentals and were wrong to
      recommend a buy when the price in fact failed to go up
      (The sales were like 10% of what they hoped for)
  [Now if every amateur investment analyst who fucked up went to jail...]

If this is true (and I may be missing important details), then why are these
unfortunates any less worthy of our support than, say, Jim Bell? :-)

Remind me some time to tell you in private e-mail of a few cases I witnessed
when large, politically connected financial services firms engaged in conduct
that would have landed you or me in jail - and it happens all the time.

---

Dr.Dimitri Vulis KOTM
Brighton Beach Boardwalk BBS, Forest Hills, N.Y.: +1-718-261-2013, 14.4Kbps