No. No! I reject this rationale. Just because its in the domain of finance and business doesn't make it ethical. For example, you can't just disclose your way into arbitrary medical experiments on people. Regardless of how you rationalize the principles, it will end up exploiting the most vulnerable citizens.

While I readily admit that the law does not forbid all forms of unethical behavior, I do believe that it should forbid blatantly exploitative acts. Like this one.

I understand the sentiment and might have had difficulty approving the sale if I were on the Hertz board of directors, however, there is a chance, however slim, that the dumb money knows something the smart money doesn't.

This is much more-readily seen post-GameStop. The AMC theater chain, mid-hoopla, managed to discharge much of its debt. The gamblers at home literally saved a major US business from dire financial straits. Some of them got paid for it, too. The company is in an undeniably better position today, as are any of the retail investors who bought and held. (The share price is up 10% today, too. The world is a complicated place.)

On the scale of exploitative acts, enabling informed gamblers to play chicken with the Bankruptcy Bus, while it may be exploitative at some level, may not be as egregious as other exploitation (Casinos? State lotteries?) that we tolerate every day.

Listen, if you guys want to strict-law yourself so people can't talk to other people, I think that's fine. There should be rules that say people who have strict-lawed themselves should be protected from loose-laws and out-laws. And strict-laws can then interact with strict-laws.

In fact, I'm even okay with defaulting to strict-laws and then one takes a test to allow being a loose-law who can interact with other loose-laws.

Then, yes, strict-laws can live a nice safe life better than ever before and spend their time arguing on the Internet about how r > g etc. etc.

But the problem is that strict-laws won't allow loose-laws so until you put that distinction in place, you should know that it is true political war and no loose-law will give any quarter because while we want to let you to be able to occupy your space, you don't want to permit us to occupy ours.

"accredited investor" law is the "loose-law" you are talking about.

I'm an accredited investor and honestly, I'd be way wealthier today if I had just done the right thing and lied about being one a little earlier.

I wish the requirements were intelligence/knowledge-based rather than resource-based but I suppose the real test of intelligence was knowing that you can lie about being an accredited investor and no one can tell so I actually failed it.

> the real test of intelligence was knowing that you can lie about being an accredited investor

If the USA is anything like Australia, this is still illegal. So maybe not so much about "intelligence" as it is "willingness to break the law when it's unlikely you'll be found out".

I suspect the latter strongly correlates with financial success more broadly, too.

Nah, no one punishes you over this because it's to protect you. The most high profile case is Chris Sacca. But he's way smarter than me so I'm willing to accept that he'll win games I can't play.

Serious question: what can you do as an accredited investor that you can’t do otherwise? Why would you be way wealthier? PreIPO companies, sure, but where do you even trade that stuff?

I'm curious, what was your best investment as an accredited investor? (No need for a specific company, general info is fine.)

Nothing is liquid yet. Also, practically every Bay Area engineer is an accredited investor because they hit the income requirements. Many are more actively involved than I am.

They said take a test. "Have a million dollars" is a grossly unfair replacement for that.

>For example, you can't just disclose your way into arbitrary medical experiments on people.

Why not? If the person checks the "medical experiments" box in return for $100k, are we saying they shouldn't get the money? People willingly trade increased risk of death for increased pay all the time. Should it be illegal to be a lumberjack, or to work the overnight shift at a 7/11?

But then we forbit selling yourself into slavery - regardless of the payment you receive. So there _must_ be a line somewhere.

It was an at-the-market offering, and Hertz didn't know anything about its market value that wasn't already a matter of public record. Hertz stock was already being traded. I guess I don't understand the ethical system that says "everybody that holds Hertz stock should be able to benefit from an irrational enthusiasm for Hertz stock except for the issuer."

Then it should also ban gambling.

We largely did in the US. There are exceptions, but generally it’s illegal to bet on the winner of a collage football game etc. https://www.espn.com/chalk/story/_/id/19740480/the-united-st...

However, that’s slowly been changing over time.

Yea, there is a reason gambling was originally banned and we get to learn that lesson all over again.

Is that the case here though?

I like your "disclose your way to arbitrary medical experiments" analogy. Things can't be just black and white. That said... who is buying Hertz stock during bankruptcy proceedings?

I don't see why this exploits vulnerable people in particular. As the op says, it's a real gamblers' trade.

Anyway, I think it's an insider-ish trading question. Selling stock once you already know the price to be zero is a step too far.

Even that exchange is not analogous, since Hertz told everyone what they were selling is worthless.

Margin Call was exactly what I was thinking as I read this. Underappreciated movie - definitely worth a watch for a more realistic take on 2008nthan The Big Short.