So said Mark Cuban, the billionaire investors and host of Shark Tank, in an appearance Friday on CNBC's Opening Bell. His comments were partially a response to a keynote address SEC Chair Mary Jo White delivered at Stanford University last week. In that speech, White said her agency is keeping its eye on unicorns--private companies that reach valuations of $1 billion or more--because of the outsize impact such businesses can have on markets and investors.
Cuban said the SEC creates a murky regulatory environment that causes fast-growth companies to remain private for many more years than they should. That prevents retail investors from sharing in the wealth created during the companies' hyper-growth phase, and cheats employees of the ability to cash out in an IPO, among other issues.
"Twenty years ago, it was the goal of every entrepreneur to go public," Cuban says. "That was the endgame, and that led to growth and more jobs and employees at all levels participating and gaining from companies going public."
Now, Cuban says, there are half as many public companies, and by some estimates, 70 percent of startups want an exit without an initial public offering. Only a small percentage of investors can benefit from the sale of private shares, mostly through second-market investment platforms.
Making matters worse, he adds, large companies gobble up the most attractive young companies, further preventing the public from sharing in the wealth.
Cuban has often been critical of the SEC, which accused him in 2008 of insider trading at his Internet search engine company Momma.com. He was acquitted of those charges five years later. In recent months, he has even filed an amicus brief with the Supreme Court objecting to the agency's lengthy administrative actions against businesses. He says the agency needs to issue clear and concise rules if it's concerned about the transparency of private companies, which are not necessarily part of its bailiwick.
"Where the SEC always goes wrong, is everything is open-ended," which creates endless gray zones, Cuban says.
Nevertheless, Cuban tells CNBC he is urging many of the startups he's invested in to pursue public offerings. His portfolio of investments comprises companies including Apptopia, Dropbox, and FiscalNote.
"It is worth the hassle of trying to go public," Cuban says.
Cuban did not respond to a request for comment.