The SEC is struggling with the concept of an accredited investor, a system that was established in 1982 and has remained largely unchanged. The call to modify these rules comes at a time when more companies are choosing to stay private longer and avoid the expense of meeting the regulatory compliance requirements of a public filing. As the Regulation D unregistered offerings increase, some believe the situation puts investors at risk. Hugh D. Berkson, president of PIABA, believes the current structure is “a particularly attractive tool to promote fraudulent” dealings. Others argue that investors should not be limited in their choices and don’t need protection.
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