SEC Pokes Fun at Investors, Draws Controversy

6/7/2022

Business

0 min read


Source: U.S. Securities and Exchange Commission (YouTube)

SEC’s Controversial Game Show Themed Education Campaign

The Securities and Exchange Commission (SEC) is accustomed to upsetting issuers and investors alike. The Commission, of course, exists to benefit both with its stated mission: Protect investors and maintain fair orderly, and efficient markets. Does this include making fun of investors or even what some view as shaming? Some self-directed investors are lashing back.

The office of Investor Education and Advocacy has unveiled a game show-themed campaign to help investors make informed investment decisions and avoid fraud. The campaign has been met by market watchers and self-directed investors at all levels, criticizing the SEC’s approach and insensitivity.

The campaign titled Investomania features a 30-second TV spot and 15-second informational videos on crypto assets, margin calls, guaranteed returns, and interactive quizzes. Its stated intent is to reach existing, new, and future investors of all ages. Believing that, at times, investing may look and feel like a game, the creators of the campaign chose a game show theme. The videos are to remind investors to do their research when making investment decisions.

Source: U.S. Securities and Exchange Commission (YouTube)

The campaign encourages investors to know what they are investing in, and get information from trustworthy sources to understand the risks before investing. This is age-old advice. The campaign also reminds investors to take advantage of the free financial planning tools and information on Investor.gov, the SEC’s resource for investor education.

It would seem from reactions on Twitter that the video campaign is viewed as derogatory. This is reflected in tweets from accounts like @ApesTogetherStrongDoc, which tweeted a nine post string which began: “Memestocks”
is a term we, along with so many of us, are guilty of using. It’s fun, calls
attention to the subversive side of all of this, but as we’ve seen with the
@SECGov’s video today, the term has entered the collective lexicon as a catcall…”

Image: Second of 9 in string of tweets by @ApesTogetherDoc

And it isn’t just the r/wallstreetbets, Stocktwits, and Reddit investment communities that are crying foul. A former Branch Chief of the SEC expressed her disappointment and even challenged the SEC chairman to clean up and educate investors in areas where she feels the Commission is lacking.

Image: Tweets by @LisaBraganca

From the SEC’s standpoint, taken from a press release dated June 2, Chair Gary Gensler is quoted as saying, “With the growing access to markets, it’s as important as ever for investors to take time to educate themselves. I encourage investors to go to Investor.gov for accurate and unbiased investment information.” In the same release, Lori Schock, Director of the SEC’s Office of Investor Education and Advocacy said about the campaign, “We continue to look for creative and memorable ways to reach and educate investors, and we hope this year’s public service campaign, with its lighthearted approach, will attract the attention of all kinds of investors.”

More On the SEC’s Videos

The campaign has been made available on YouTube. In one 30-second “TV” spot a game show host asks two contestants to pick a square on a video game board with investment options including internet rumors, celebrity endorsements, stock tips from your uncle, crypto to the moon, FOMO, meme stocks, tulip bulbs, guaranteed returns, and timing the market. The video is intended to show investors the consequences of their investment decisions and to help investors understand the importance of protecting themselves when making investment decisions. After the contestants make their choice, the video pokes fun at the contestant’s choice if it doesn’t involve solid due diligence.

The 15-second videos contain three categories. In the video covering cryptocurrency speculation, a celebrity encourages investors to take their advice and buy crypto-assets. The video is intended to remind investors not to be tempted by celebrity endorsements, and instead do their own independent research. There is another video related to investing on margin; its intent seems to be to tell investors that borrowing money to invest can be very risky. Another video is titled Easy Money. This video reminds investors that there are no guaranteed financial returns on investments and that every investment, no matter how good it may sound, has a risk.

Take-Away

A well-intentioned education campaign by the SEC seems to have turned off a large population it had intended to help. While prudence, research, and understanding of risk are basic tenets of investing, the approach used in this campaign may be less than effective.

Let us know what you think by visiting this article posted on our Twitter account (@channelchek) and tweeting your thoughts, while there, please follow us to stay in touch.

Paul Hoffman

Managing Editor, Channelchek

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