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Comment by thesausageking | Hacker News Reader

If a billionaire wants to blow their money on a risky bet, why should the SEC stop it? The $20B he "lost" went into the market and everyone, including retail investors, benefitted. The losers are Hwang and the banks Credit Suisse and Nomura, each of which will do a better job of assessing this kind of risk in the future. Hwang didn't have any outside capital so no one's 401k or personal holdings were affected.

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The idea that he only hurt himself is simply not true. Behavior like this distorts markets and price discovery. Speaking of discovery (DISCK/DISKA), that's one of the stocks he bought and ran up from low $20s to $60s. Everyone who bought along the way thinking that the company had turned the corner because of their new streaming platform and that it was now in favor on Wall St. has been crushed. Yes, the market is volatile, but it's even more volatile when we allow some participants to come into the market loaded with cheap money and create havoc. If we're going to allow this unbridled behavior it undermines confidence in the "market". I know I've lost complete confidence in it since the GFC and now with the antics of the Fed over the past year. Knowing that there's no true price signal on anything makes you not want to buy anything, or else accept that the activity is nothing more than a turn at the craps table.

And yes, in theory you should be fine long term, but the problem is it depends on your time window. The market can go nowhere for decades because of all the future profits that get pulled forward. We're staring that exact scenario in the face right now is my guess.

All this is to say but one thing... end the Fed. Their recklessness is enabling this kind of crap.

> Everyone who bought along the way... has been crushed.

Everyone who was crushed was under-diversified. Individual stocks fall by 50% all the time.

So what? In general retail investors who take concentrated positions in individual stocks are fools playing with fire. They're going to eventually take a huge loss regardless of the specific cause.

That's what you took away from my response? So what? It's not a problem that this kind of behavior is enabled and hurting the integrity of what the majority of people rely on for a shot at being able to retire someday? This is one fund that blew up during good times. How many others are out there acting this way and what's the risk that everyone is taking without even knowing by being invested in the market at all? Are you up for another GFC or bust that takes 10+ years to get back to even? Because these things are the seeds for that. Booms and busts aren't a good thing.

I guess I just see things differently. This isn't about being properly diversified, this is about the integrity of our markets and trust. I mean if the idea is that it's a free for all then why have securities laws at all? The US markets have been viewed as a haven of trust and stability. Garbage like this only serves to undermine that trust.

> If a billionaire wants to blow their money on a risky bet, why should the SEC stop it?

It's not "their money" to blow. 80% of that money was borrowed from others and he now cannot afford to pay them back. Yes, the SEC should definitely care

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