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SEC Provides Fresh Advice on Verifying Accredited Investors

Joe Mont | July 8, 2014

The Securities and Exchange Commission has offered up additional guidance on how hedge funds, venture capitalists, and start-ups should verify accredited investor status when they advertise private securities offerings.

In July 2013, the SEC amended Rule 506 of Regulation D to allow general solicitation of private offerings. The SEC amendments, however, permit advertising and marketing only if issuers “take reasonable steps to verify” that all of the purchasers are accredited investors, with a verifiable a net worth of at least $1 million in liquid assets. An issuer...

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