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Elizabeth Warren thinks the Securities and Exchange Commission’s settlement with fallen hedge fund titan Steven Cohen is a big joke.

The Democratic senator from Massachusetts ripped into the SEC for allowing the former SAC Capital chieftain to start a new hedge-fund firm just two months after he was barred from managing outside money until 2018.

Cohen’s move has made a “mockery of the SEC’s core mission to protect investors,” Warren wrote in a letter Thursday to SEC Chair Mary Jo White.

In January, Cohen agreed to a two-year ban on managing outside money to resolve allegations of insider-trading at his former firm. He didn’t admit to any wrongdoing as part of the agreement with the SEC.

After the insider trading plea, Cohen converted SAC into an $11 billion “family office,” Point 72, which mostly manages his huge personal fortune.

But within five weeks, Cohen had filed paperwork to start a new firm, called Stamford Harbor Capital, that can raise funds from other investors before his sanctions are lifted.

A spokesman for Cohen insists he isn’t skirting the settlement because — even though he owns the new firm — he won’t actually manage any of the money.

Indeed, the SEC settlement includes a provision that allows Cohen to raise outside money so long as he doesn’t have a supervisory role.

Still, Warren believes the SEC fell down on the job. She wants the agency to “put procedures in place that ensure that future settlement agreements cannot be so easily undermined,” according to her letter.

WHY THE UNICORN FINANCING MARKET JUST BECAME DANGEROUS…FOR ALL INVOLVED

What’s that? You have a day job? You don’t have time to read a 5,700-word piece? Even if it’s only 5,681 words?

No worries. Part of my day job involves summarizing 5,681-word pieces. Here you go.

What’s the big picture?

Gurley says too many Silicon Valley companies have raised too much money, and now they’re in trouble. The same goes for the investors who gave them all that money. “Times are changing,” he tweets.

That sounds familiar.

That’s because Gurley has been saying too many Silicon Valley companies have raised too much money, and will be in trouble, for a couple of years now. And every time he says it, it generates a lot of attention.

Okay. So what’s new here?

If you are cynical, you might argue that it’s Gurley’s victory lap. A less cynical take: Many investors have come around to Gurley’s point of view and are less likely to pour money into tech companies at any valuation.

So what does that mean for the tech company I work at or invested in?

This is the most important part of Gurley’s essay: He sketches out a scenario in which companies that have gotten used to easy money but have yet to build a business that makes money, find that they need to raise more money — and that the easy money is gone.

Now, they may have to raise money at valuations below their previous marks — the “down rounds” you’ve heard whispers about for some time. A worse option would be raising money via “dirty term sheets,” which come with all kinds of ugly-sounding mechanisms like “ratchets” and “superior preferences.”

What’s wrong with those mechanisms?

You’ve seen movies where people borrow money from loan sharks, right?

If things are so bad, how come I’ve read about VCs raising a ton of money in the last few months?

This is a big part of Gurley’s essay. He describes a landscape where panicked VCs are loading up on cash before the value of their investments plummets. And since many traditional investors in VC funds are done investing, VCs and their portfolio companies are hitting up anyone with a checkbook. Maybe even you.

Is that why I just got an email offering me the opportunity to invest in a VC’s “friends and family special vehicle”?

Sure could be. Gurley takes special care to denigrate special purpose vehicles, which are basically mini-funds VCs raise to supplement their main funds. He calls them “eerily Madoffian.”

Wait a minute. Gurley is a VC. So he’s invested in lots of companies that have raised lots of money, at very high valuations. Like Uber. Right?

Right.

I’d like to hear a more optimistic view of all this. Who should I ask?

A good bet would be rival VC Marc Andreessen, the anti-Gurley. “I can’t stand him. If you’ve seen ‘Seinfeld,’ Bill Gurley is my Newman,” he told the New Yorker last year. Keep an eye on his Twitter account.

Hey! Don’t you work at one those companies that have raised a lot of money recently? Doesn’t this worry you?

Oh look at the time! Gotta go.

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