[quote=enron_by_the_sea]Be careful with those dreams of buying the IOUs at discount. SEC decided today that those are securities.
As a result you might need a license and/or maybe exposed to lawsuits from the seller claiming misrepresentation…
I think it is ultimately bad for the holders of the IOUs. They will find few people willing to buy them except Goldman/Morgan……
“As securities, the IOUs are subject to the antifraud provisions of the securities laws,” the SEC said in a statement. “As a result, buyers and sellers will have certain rights and remedies for fraud, and the Commission will be able to take action against any person committing fraud in connection with the purchase or sale of an IOU.”
IOU What would constitute fraud? Say an individual decides to act as a dealer, buying IOUs from people who are stuck with them. This individual tells a potential seller, “I have it on good authority that the state won’t repay these IOUs as promised on Oct. 2. You’d be smart to take 85 cents on the dollar right now.”
Assuming the state has said nothing about delaying repayment, the would-be dealer could be charged with misrepresentation under federal securities laws.[/quote]
Yup. Oh well…
Translation of the SEC ruling.
It’s not ok for individuals to rip off IOU holders at discounted prices…
However, it’s ok for banks/institutions/brokers with “licenses” to rip off IOU holders….
Lol….I’ll start claiming 10 for a CA income tax exemption, thank you very much
