If it wasn't regulated, the brokers could trade off insider information, prioritize rich client's orders over others, they could hold orders back and trade ahead of them, offer preferred pricing to some clients over others, sell short shares they don't have borrowed, outright steal securities they're holding for clients, lie or misrepresent investments, loan unreasonably high amounts off investments, have unqualified and uneducated people advising people incorrectly, fictional or fraudulent trading and reporting etc... etc... Even with regulation there's still a lot of corruption left, without regulation it would be completely unreliable, corrupt and unfair to investors.
Of course. I think the bitcoin exchanges are good examples of why regulation is very necessary. Even in the most heavily regulated US stock market, we're seeing such a lopsided playing field due to the HFT going on these days with all them quants and computers being used to hold on to equities for milliseconds. It's quite ridiculous really.
Even with the current regulations there is a lot of sketchy stuff going on, I don't think I'd touch the stock market even with a large stick if it wasn't regulated!
As long as it remains part of human nature to be selfish and greedy, and as long as a few will actually act in such ways at the expense of any and all others, there needs to be a neutral governing body keeping us all in line and holding us accountable.
It'll always be a cat and mouse game. That being said, once we introduce law that gives out harsh punishment for stuff like insider trading, it'll deter more people from doing so. We need death sentences for these. It'll definitely turn off many unassuming people from going over to the dark side.
I agree harsher punishments and most importantly more investigation should be done in order to catch inside traders. We all know it happens.
Death sentence for insider trading? Are you kidding me? BTW, until recently members of Congress were able to trade freely on insider info. That's how Al Gore got so rich so soon - insider trading and exploiting "global warming" fear mongering.
Regulations in the stock markets are very important and without them any trader or investor will be at risk. People will find ways of circumventing regulations and it is therefore important that regulations are updated as we go along. Funny stuff will unluckily always happen and as investors we need to keep our eyes open and ears to the ground. If something does not look or feel right, get out and limit your risk.
I also agree that stock market regulation is necessary. Such a drastic amount of money is on the line every day. This makes people do evil and unethical things sometimes.
