By Brooke Masters. (Financial Times). August 15, 2023.
For more than a century now, US watchdogs have policed the financial landscape, seeking to protect investors from potential fraud and the consequences of their own blind optimism.
Most of their efforts to ensure that investors get accurate information about what is happening to their money are focused on familiar products, such as stocks and bonds. But every so often an explosion of interest in new investments forces a debate about the regulatory perimeter and whether to expand it. This is one of those moments.
Right now, the US Securities and Exchange is fighting on multiple fronts to bring enforcement cases involving cryptocurrencies, while a completely separate lawsuit is seeking to upend more than 30 years of practice in the leveraged loan market.
The laudable goal is investor protection. The volatility of bitcoin and other tokens and the implosion of the FTX crypto exchange have cost investors billions; and a bankruptcy trustee is seeking to recover money for loan investors left holding the bag when a drug testing firm went belly up after being investigated for fraud.