Section 17(a)(3) of the Securities Act provides, in pertinent part, that: "It shall be unlawful for any person in the offer or sale of any securities . . . by the use of any means . . . to engage in any transaction. . . . "

Thus Ms. Peirce raises an important question: to what extent (if at all) should the regulators stretch their interpretation of their authority to reach conduct that may be inappropriate, but is arguably not within the scope of their authority? As the Commissioner…

Commissioner Crenshaw should be applauded for pushing the regulators to conduct testing of their regulatory theories, both before adopting and after implementation. It is all to the good that the SEC and other financial regulators (i) slow down the pace of reaction to market events, such as GameStop, to allow time for consideration, and (ii) generally conduct more testing both before adopting rules and again after implementing them to test their effectiveness.

Testing, however, will…

While the SEC's warning is directed towards investors, broker-dealers may take this as a warning to institute procedures to monitor sales of Bitcoin-focused funds to retail customers.

The SEC should conduct studies to better understand as much of the GameStop event as it can; Congress should direct such studies as it may find useful. However, it does not make sense to rush into legislation without some determination that there is a material benefit to it.

The bills on "payment for order flow" and on "trading ahead" are particularly notable examples of rushing into legislation. The practice of "payment for order flow" has probably existed for as long as the U.S.…