[icsys]

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Regulation S was crafted as a safe harbor that allows public companies to sell shares to non-U.S. citizens. In essence, while regulators wanted to assure that U.S. investors had adequate access to information about public companies, non-U.S. residents were not afforded the same protection. Those non-U.S. residents would be permitted to buy and sell shares, among themselves, even though the issuer had never registered those shares with the SEC.

In other words, companies were given license to do abroad what they could not do at home - dump shares on the marketplace without registration or disclosure.

Why would lawmakers, who so carefully crafted securities laws that demanded both registration and disclosure, also create this massive loophole in the system?...

...In other words, Regulation S is an invitation for abuse. Its potential harm far outweighs its actual benefit.