3 ms·
Investors in private companies need to be accredited per SEC regulations (correct?) [1]. Do investors in these derivatives also need to be accredited? Clearly,
by jaydub 16y ago
Investors in private companies need to be accredited per SEC regulations (correct?) [1]. Do investors in these derivatives also need to be accredited?
Clearly, "because private-company financials are opaque" investing in the derivatives is speculative. The securitization of Facebook shares is not inherently "evil", but the issues arise if/when these derivatives are misunderstood and overly available for public consumption.
[1] http://www.sec.gov/answers/accred.htm http://www.sec.gov/answers/accred.htm
- zach 16y agoSince they're actually investing in an LLC, the rules (search "506 offering") would be the same. It can only be "sophisticated" investors and no more than 35 can be non-accredited. Note that there can be no solicitation or advertising of the offering to the general public. In practice, as you can see, this means you can leak all the details to Bloomberg but then cannot comment for the story. Because, you see, that would be solicitation.
- billboebel 16y agoYes, you need to be accredited (I am an investor in one of these funds)