ENDNOTES
1. House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises Holds Markup on HR 1965, HR 2167, HR 2930, HR 2940 and a Draft Bill Concerning Small Companies and Regulatory Relief, 112th Cong., 1st Sess. (Congressional Hearing held October 5 2011), Congressional Quarterly Transcripts at 8-9.
2. See, for example, Commissioner Luis Aguilar’s statements titled “Increasing the Vulnerability of Investors,” available at
http://www.sec.gov/news/speech/2012/spch082912la a.htm.
3. Net Worth Standard for Accredited Investors, Securities Act Release No. 9287, Investment Company Act Release No. 29891, 2011 WL 6415435 (December 21 2011) (the Net Worth Standard Adopting Release).
4. On January 25 2011, the SEC proposed amendments to the accredited investor standards. See Net Worth Standard for Accredited Investors, Securities Act Release No. 9177, Investment Company Act Release No. 29572, 2011 WL 231559 (January 25 2011).
5. 17 CFR § 230.215. 6. 17 CFR § 230.501(a)(5). 7. Rule 501 defines the term “accredited investor” for purposes of exempt and limited offerings under Rules 504, 505 and 506 of Regulation D. Rule 215 defines the term “accredited investor” under section 2(a)(15) of the Securities Act, setting the standards for accredited investor status under section 4(5) of the Securities Act, formerly section 4(6), which permits offerings solely to accredited investors of up to $5 million, subject to certain conditions. 15 USC 77d(5). Former section 4(6) of the Securities Act was renumbered section 4(5) by section 944 of the Dodd-Frank Act.
8. Section 413(a) of the Dodd-Frank Act, Pub. L. No. 111-203, § 413(a) (2010), states: “The Commission shall adjust any net worth standard for an accredited investor, as set forth in the rules of the Commission under the Securities Act of 1933, so that the individual net worth of any natural person, or joint net worth with the spouse of that person, at the time of purchase, is more than $1,000,000 (as such amount is adjusted periodically by rule of the Commission), excluding the value of the primary
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residence of such natural person, except that during the 4-year period that begins on the date of enactment of this Act, any net worth standard shall be $1,000,000, excluding the value of the primary residence of such natural person.”
9. See 17 CFR § 230.215(e) and § 230.501(a)(5) (2010).
10. The SEC stated: “… so the two rules will implement Section 413(a) of the Dodd-Frank Act in the same way.” See Net Worth Standard Adopting Release at *4.
11. See id. at *5. 12. See Rule 501(a)(5)(i)(B) (as amended). 13. Id. 14. Id. 15. See id. at *7. 16. Id. The SEC further explained: “that is the basis on which interest accrues under the mortgage and the amount that third parties would look to in assessing creditworthiness.” Id.
17. Dodd-Frank Act, § 413(b). 18. Dodd-Frank Act, § 415. 19. See Net Worth Standard Adopting Release at *3. 20. Study is available at:
http://www.sec.gov/news/studies/2012/917-financial- literacy-study-part1.pdf.
21. Letter dated June 19 2012 is available at
http://s3.documentcloud.org/documents/370607/issa -ipoletter-june2012.pdf.
22. See
http://www.finra.org/web/groups/industry/@ip/@reg/ @guide/documents/industry/p010373.pdf.
23. See letter at
http://online.wsj.com/public/resources/documents/se cipoletter0826.pdf.
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