Q: Should the SEC approve an accredited investor exam?
Steve Mickelsen, General Counsel, 3Degrees Group
The mission of the US Securities and Exchange Commission
(SEC) is to 'protect investors, maintain fair, orderly, and
efficient markets, and facilitate capital formation'.
To enable its goal of protecting investors and facilitating
capital formation, it has adopted different structures for
investors to invest in public companies versus private
companies. Public company shares are traded on a public market,
such as Nasdaq and public companies are required to make
regular public disclosures of business and financial
information. Private company shares are traded
over-the-counter, typically have more limited disclosures, and
the ability of owners of private company stock to resell their
stock is severely restricted by SEC rules.
The SEC's regulation D rules restrict most private company
stock sales to accredited investors. Presently, to be an
accredited investor, a natural person must have earned