Comment by cperciva

>If the US SEC were replaced by 50 per-state SECs, you'd probably see Alaska or Wyoming becoming the scam capitals because they lack the resources to properly regulate.

Arguably a distinction without a difference but I think you'd have Delaware or somewhere that has plenty of resources being the scam capital and they'd make money off it. Then you'd have a bunch of over-regulated dumps that have driven out their industry and they'd all be screeching about Alaska for having fairly permissive regulations while ignoring the 800lb Delaware in the room. And the other 35ish states would be in the unremarkable middle ground.

You already somewhat see this kind of pattern across existing interstate industries.

>If the US SEC were replaced by 50 per-state SEC

In the US, states perform a fallback-SEC role for certain investments. While state-level commitment to combatting fraud may also be questioned— looking at you Kansas— the existence of a backup system does provide a useful “now entering Oz” kind of warning.

[1] https://www.investopedia.com/terms/b/blueskylaws.asp

I was referring to the US SEC and DOJ, they will easily establish jurisdiction against anyone touching US markets in some way, anywhere in the world

Including Vancouver

(The US has state level securities regulators too, but they are redundant, weak and almost defunct, but they still exist in every state.)

There is no obvious benefit to being sketchy in BC aside from many things are legal in the US, it’s just a matter of convincing investors to invest

I guess there’s just a sketchy network up there

> If the US SEC were replaced by 50 per-state SECs, you'd probably see Alaska or Wyoming becoming the scam capitals because they lack the resources to properly regulate.

Sure, but BC is 10× the population of Wyoming, so that's not really the best comparison. Plus, Delaware is tiny, yet their business regulations are fairly strong.

> past Federal governments have said "hey look this is stupid let's just merge the regulators so we can do one good job instead of 10 bad jobs" but politics got in the way.

It gets messy. Ontario is the de-facto "legitimate" Canadian securities regulator because it's where our overwhelmingly largest stock exchange is (the TSX). Ontario obviously wants to protect that. When he was Minister of Finance for Ontario, Jim Flaherty defended the status quo tooth and nail. As soon as he became minister of finance federally, he immediately changed his tune.

Part of the problem is that the constitutional quirks in Canada have frustratingly annoying jurisdictional separations. For example, criminal law is a federal responsibility. The provinces cannot sentence somebody to prison for more than 2 years (which is why you often see people sentenced to "two years less a day"), so securities violations that aren't outright traditional fraud are essentially a slap on the wrist. There are other quirks, for example criminal law is defined federally, but policing is mostly provincial. There's also the fact bail is set at the provincial level and the federal government gets enormous grief about people getting bail too easily, when it's the provinces not properly funding the jails, forcing judges to essentially let all but the worst offenders out to reoffend (the problem is somewhat overblown in the media, but it is a problem).

The issue is made worse by the fact that the last time somebody tried to amend the constitution, it blew up in the government of the day's face (that was already unpopular for other reasons) and politicians have been fearful of touching it since, because they know it'll balloon into all sorts of regional demands - the constitution was barely able to be patriated in the early 1980s - and even then with some very questionable clauses:

https://en.wikipedia.org/wiki/Section_33_of_the_Canadian_Cha...