RSS FeedRSS

Sometimes the thoughts of an unbiased outsider can best illustrate how a rigged stock market makes investing in gold coins a wise decision.

January 13, 2011 – Sometimes the thoughts of an unbiased outsider can best illustrate how a rigged stock market makes investing in gold coins a wise decision. L. Gordon Crovitz, writing for The Wall Street Journal, Europe, uses the Facebook offering as an example of how Washington has helped private equity interests deprive individual investors of the opportunity to participate in the lucrative IPO market.

In 2002 Washington passed the Sarbanes-Oxley Act, a massive regulatory bill consisting of 11 titles, in response to the Enron, Tyco, and WorldCom debacles, among others. The lofty professed intent of the act is reflected in the Senate’s version, “Public Company Accounting Reform and Investor Protection Act” as well as the House’s “Corporate and Auditing Accountability and Responsibility Act.” But the main effect of the act has been to make public offerings so costly and complex that new ventures find them prohibitive. The only alternative left for them to raise the capital they need to move on to the next level is a private equity offering, which is exempt from Sarbanes-Oxley.

That’s what Facebook did, raising one half billion dollars by selling shares exclusively to Goldman Sachs for the benefit of their wealthiest clients. Before Sarbanes-Oxley individuals had an equal opportunity to invest in the capital raising stage of promising new companies, which is where the big money is. Without an IPO market, individuals are stuck with investments in mature companies offering only a share in their profits. And those profits are often channeled away from investors into M & A and other schemes that benefit only insiders.

Crovitz cites this telling comment by Illinois law Prof. Larry Ribstein: “The increased costs of being public have helped exclude ordinary people from the ability to own the stars of the future.” But not from the ability to profit from investments in gold coins.

Kevin Johnson

Senior Staff Writer – GoldCoin.net

Get Your Complementary Award Winning Guides Below

 Publish Real Money Magazine

 Publish Gold Investment Magazine

 Publish IRA 401K Kit Magazine

 Real Money Magazine

captcha