The agency said it hopes the changes to its “accredited investor” definition will boost retail investors’ access to the swelling pool of companies that are staying private for longer. But the change was criticized by investor advocates and agency officials who say even seasoned investors struggle to spot problems with private companies.
The SEC did not say how many additional investors would fall under the new definition, but said it was aimed at individuals - such as hedge fund employees or brokers - who would not have previously qualified but are knowledgeable about private offerings. Wednesday’s rule faced criticism from the agency’s Democratic commissioners, who voted against the rule change because it could leave investors vulnerable.
PrimeWednesdayService
A big day when the SEC for the first time in 35 years expands the categories for ‘accredited investors.’ Hopefully just the first in many progressive SEC actions designed to allow more democratic access to the once esoteric arena of private market and venture capital investing