The SEC should have said "Very clever, kids, but, ah, no. Knock it off." A fine here is ridiculous -- the participation was capped at $250, this clearly wasn't intended to take in serious amounts of money. The SEC can't let something like this go on, but it can be less hamfisted in its handling.
Really the right thing here would have been a visit by SEC staff, asking a lot of questions and pointing out some security law violations, at which point the operators go "umm, didn't think about that, we'll be good". But that approach doesn't let the bureaucrats justify 100 hours of browsing on their time sheets, does it?
The injunction to obey security laws going forward does make sense, it gives the SEC leverage if these same people actually do pop up later as scammers.
Some journalism on what they were doing:
http://www.bloombergview.com/articles/2015-03-11/how-should-...
http://ftalphaville.ft.com/2015/03/10/2121090/sand-hill-is-t...
Really the right thing here would have been a visit by SEC staff, asking a lot of questions and pointing out some security law violations, at which point the operators go "umm, didn't think about that, we'll be good". But that approach doesn't let the bureaucrats justify 100 hours of browsing on their time sheets, does it?
The injunction to obey security laws going forward does make sense, it gives the SEC leverage if these same people actually do pop up later as scammers.
Some journalism on what they were doing:
http://www.bloombergview.com/articles/2015-03-11/how-should-...
http://ftalphaville.ft.com/2015/03/10/2121090/sand-hill-is-t...