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No. of Recommendations: 7
Albaby,

Thanks for your comments and if you are not an expert then what am I? A couple of points. Let me present exhibit #1, S.E.C. v. Yun Soo Oh Park a/k/a Tokyo Joe

Specifically, the Complaint alleges that Park, a resident of New York, New York and the sole shareholder of Societe Anonyme, provides investment advice over the Internet, including stock picks, to his clients, largely members of an Internet day trading community who pay $100 to $200 per month to Societe Anonyme for the privilege of receiving his advice.
http://www.sec.gov/enforce/litigrel/lr16399.htm

As far as I can understand TokyoJoe provided investment advice over the internet in a way substantially similar to what could take place on Trick's proposed private subscription based boards. Then Bernard, or anybody else hosting the private boards of similar type, would also be subject to the Securities Exchange Act of 1933 and the Investment Advisers Act of 1940. As the SEC write at the end of the above referenced document:

Based on the foregoing, the SEC filed a Complaint in the United States District Court for the Northern District of Illinois against Park and Societe Anonyme charging violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, Section 17(b) of the Securities Act of 1933, and Sections 206(1)and 206(2) of the Investment Advisers Act of 1940.

Exhibit #2: Well there is no exhibit #2 only my own speculation and moral. Without promotion from TMF the idea of private boards will never be a success. Thus TMF must actively promote and will benefit financially from any TokyoJoe type person that occupy one of their private boards. At the same time TMF itself is borderline financial adviser (sometimes crossing the border on the boards) with the reputation of saying that everybody is full of .... and only they can be trusted. Therefore I would find TMF at least morally liable (if I can't convince you about the legal aspect) for the content of its private boards.

I also happen to personally think that TMF should be subject to regulation even in its present form in an ideal world (which we don't have of course). This would have taken care of the problem with the (lack of) disclosure policy in the first place. Moreover it would ensure the obvious conflict of interest when a certain TMF staffer sells his Nokia stake by forcing him to disclose an intent to sell ahead of time. In the most ideal of worlds a certain rule-breaker manager would need to disclose his personal sales of his stake in Amazon.com before the official portfolio sell announcement. Ideally also the author of the TMF research report on Amazon.com who neglected to mention the company's problematic debt load and unstable financial situation about a year ago when he wrote his first report while he held a personal stake in the company should have been forced to disclose an intent to sell before he rid himself of his position. Sorry but I got carried away in dreaming about an ideal world that goes beyond SEC.

In fact, TMF has branded itself as the ultimate example of that philosophy - investors writing for investors.

I consider investors writing for investors the ultimate stupidity in business model. If you want to maximize the number of possible conflicts of interest (read the above examples regarding Amazon.com) then fine. However, if you want to make sure that you provide unbiased information then please don't write about your own stocks, please!

Datasnooper.

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