The whole toxic lending / stinky pinkie combination is a massive fraud perpetrated on naive investors. Both lenders and companies with poor business plans should be shut down, and could be with the simple closing of this huge loophole.
But FINRA's members are making money too by taking commissions on these transactions in the millions and playing along with the lenders. Companies like HJOE are in business only through the funding of the toxic loans. So no one has any incentive to stop the fraud except Joe Newbie, who loses his money.
And we know from Flint how much power JN carries with the government.
“No one in this world, so far as I know — and I have searched the records for years, and employed agents to help me — has ever lost money by underestimating the intelligence of the great masses of the plain people"
H.L. Mencken