The SEC is taking aim at retail investors. The financial watchdog has released a new game show-themed public service campaign to help investors make informed decisions and do their due diligence before investing, but retail traders say they feel attacked. Tyrone Ross, Founder of 401, breaks down the battle between the two groups, and what can be done to mend their relationship.

Opening Bell

Retail Traders Say SEC Campaign is Mocking Them

Here to discuss his Tyrone Ross, founder of 401 Tyrone. This is an unusual move for the sec. I wonder if I can get your thoughts first on, what message do you think the sec was trying to send with some of these videos? And what was your reaction to seeing some of them? I think the first messages, they didn't spend a lot of money on the production of the videos because they are very good. But I think what they were trying to do is lean on the side of millennials and gen z investors that are on video and trying to make it laughable. But in some ways it was demeaning and I think that's why you're seeing the outcry that you're saying with social media and reddit in platforms like that. Yeah, I mean, to that effect, if you see some of these on social media, the the thread of responses are more interesting than the videos themselves in terms of retail investors saying just how displeased and how offended they are with the sec seemingly insulting them. You know, while they were seemingly, and we would assume trying to to educate these retail investors. I wonder your thoughts in terms of should the sec be embracing retail investors more rather than a video like this. That seems to want to educate them, while simultaneously criticizing the retail investors as one video that that comes out of mind that I saw that really was like guaranteed returns for 100 jim. And then the, you know, it's, it's, it's them trying to say that there's no guarantee return. I don't think any retail investor, any investor, I really think there's a guaranteed return here, which then goes to the point that this was captain obvious potential mocking here. It was. And I think that's the thing, that's the most upsetting. When I sat on one of the most recent sec investment advisory committee meetings, I have said, well, let's define what you all mean by investors. The old definition of investor no longer applies here. There is a younger generation that have come to investing, but they look at it differently. It feels different. They get their information in different ways. That is not to be mocked. That is to be embraced. And I think you even saw on social media folks that are a part of the sec and loosely a part of the sec were disappointed in that approach as well. And the most disappointing part to me is investor dot gov is actually a really good site, a very informative site that Hester Pearce pointed out to me that I didn't even know existed. And when she pointed out to me, I'm like, man, that's a really good information here. There was a much better way to put investor gov, um, in the eyesight of that investor base, but not to do it in this manner. What do you think that extent needs to be done for the sec to truly have the back of retail investors while its mission is to have the back, essentially, all investors. And then for retail investors to respect the sec because there seems to be, um, this divergence and this, this, um, you know, clash between the two groups that are supposed to be there to help each other or the sec at least help retail investors and all investors. Yeah, there's a chasm here. Right. And I think the sec needs to embrace a change, right? And I think that's by defining some of the things that they've leaned on before the custody rule, what it means to be a fiduciary what an investor is. So they need to update everything. And I think that's embracing bringing in younger and new voices, which myself and others have sat down with Commissioner Crenshaw's office. So they are actively trying to hear from those that are in the space and a younger cohort. But what they're not doing is acting on the advice that they're giving everything is wagging the finger. Meanwhile, they talk about investor protections, but they launched a Bitcoin futures E T. F, who does that benefit? It doesn't benefit the retail investor, it benefits seasoned investors and large investors and asset managers. So it's the, it's the proverbial talking out of both sides of your mouth. So I think one, they need to get on the ground getting closer to investors, the new class of investor to not mocking them and putting out videos in that manner in three, it would be very simple to get on the forums where all of these young investors are, whether that's twitter or Tiktok or whatever the case may be and just kind of wrap your arms around him and say, hey, we want to teach, we want to listen that. I think that's the best approach moving forward because they are the investors in the future that are still here. I think it's the beginning of this. Many people thought that there would be a wave and there would be a fizzle out. The retail investors still here. To the point where we did a story yesterday on stock splits and you're seeing companies really trying to garner the attention of those retail investors, Tyrone, we're coming up against the Bell, so we're gonna have to leave it there, but really appreciate your time and insight on the topic. Tyrone Ross, founder of 401