7 ms·
It's not. It serves as a counterbalance to much lighter reporting/auditing requirements for private vs. public companies. It's way easier for a private company
by matrix_overload 3y ago
It's not. It serves as a counterbalance to much lighter reporting/auditing requirements for private vs. public companies.
It's way easier for a private company to do some creative accounting and do away with your money without committing a criminally punishable offence. The idea is that if you have $1M in assets, you can tolerate that risk (or do your own due diligence), but if your entire life savings is something like $50K, don't give them to that sleazy guy on the phone that isn't independently audited or banned from pump-and-dumping his own stock.
- tastyfreeze 3y agoIt isn't the government's responsibility to protect people from their own mistakes. Accredited investor laws only serve as a gate keeping mechanism.
- yathaid 3y agoThat's like ... your opinion. It isn't the government's responsibility to make sure there isn't lead in the food you eat, but we have the FDA. Ditto usury laws, medicine laws etc.
- tastyfreeze 3y agoYup. The government does a lot more than it was set up to do.
- greyface- 3y agoIt is literally the SEC's responsibility to protect people from their own mistakes.
- fsckboy 3y agoit is not the SEC's responsibility to protect accredited investors from taking risks, it's essentially the meaning of the term
- greyface- 3y agohttps://www.sec.gov/our-goals https://www.sec.gov/our-goals says: > The SEC’s long-standing three-part mission—to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation The Securities Act of 1933 contains the phrase "protection of investors" 27 times. It's quite literally part of their mandate.
- fsckboy 3y agowhere's the word "accredited"? and I said "from taking risks", so where does it say that? words matter, as you are trying to indicate. Accredited investors are allowed to take risks without the level of oversight that "naive" investors are given. Selective quoting does not change that.
- SturgeonsLaw 3y agoMy biggest gripe with it is that it's gatekeeping based on net worth. There should be a mechanism to become an accredited investor with any income/wealth level if you pass a financial knowledge exam. Yeah, those can be gamed, but if someone is willing to cheat on a test in order to remove their legal protections and access risky investments, well, good luck to them.
- greyface- 3y agoThis exists. https://www.finra.org/registration-exams-ce/qualification-exams/series7 https://www.finra.org/registration-exams-ce/qualification-ex... https://www.finra.org/registration-exams-ce/qualification-exams/series65 https://www.finra.org/registration-exams-ce/qualification-ex... https://www.finra.org/registration-exams-ce/qualification-exams/series82 https://www.finra.org/registration-exams-ce/qualification-ex... Pass any one of these, and you're an accredited investor.
- zoklet-enjoyer 3y agoRight, as a normie investor, I'll stick to gambling with the safe penny stocks
- imtringued 3y agoIn Germany the limit is 1000€ on a single investment for investors who do not disclose their financial status. 10000€ for those who can prove they have more than 100000€ in cash and beyond that you are at most allowed to invest twice your monthly income up to 25000€. This is for crowdinvesting only but this convertible note campaign is very similar to crowdinvesting campaigns in Germany. Although it is possible for companies to let investors invest directly, usually there is a licensed financial advisor running the crowdinvesting platform that handles payments by delegating them to a licensed payment service provider. The financial advisor is also supposed to screen investments and make sure the investor understands what form of investment he is making and how much risk he is taking on. If you want to get past these limits you wouldn't go through a crowdinvesting campaign.
- deleted 3y ago[deleted]