The answer to your question that is typed out in bold print is the following. He who participates in equity lines of credit on a regular basis as a regular course of business may need to be registered as a broker dealer. The SEC has simply not gone after those companies as of yet. The defendants in these cases have used mutual funds and day traders as an example of why they should be deemed innocent. Those arguments have been soundly rejected by about four federal courts to date. The difference I believe between toxic funders and mutual funds and daytraders is that the toxic funders actually underwrite the note themselves as opposed to a mutual fund that is just buying securities of a company that have been under written by someone else.
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