Subject: File No. DF Title IV - Accredited Investor
From: Keith P Bishop
Affiliation: Adjunct Professor, Chapman University School of Law

September 24, 2010

The Securities and Exchange Commission ("Commission") should consider the following in connection with its review of the definition of "accredited investor" pursuant to Section 413 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Act"):

1. The Commission's staff has announced the view that pending implementation of the changes to the Commission's rules required by the Act, the related amount of indebtedness secured by the primary residence up to its fair market value may also be excluded. This interpretation fails to take into account the fact that states have enacted anti-deficiency statutes. Please refer to this post on July 27, 2010 on for a discussion of the staff's position in light of state anti-deficiency legislation.

2. The Commission should amend the definition of "accredited investor" to include governmental agencies as proposed by the State of Alaska.

3. The Commission should clarify that the determination of accredited investor status need only be made at the time of the initial sale. For example, if stock and warrants are issued in an offering, the subsequent exercise of the warrant by the investor should not require another determination of "accredited investor" status.

4. The Commission should amend Rules 215(c) and 501(a)(3) to include an express reference to limited liability companies.

5. The Commission should amend Rules 215(d) and 501(a)(4)to include an express reference to managers of limited liability companies.

By way of background, I previously served as California's Commissioner of Corporations and a member of the California Senate Commission on Corporate Governance, Shareholder Rights and Securities Transactions. The foregoing comments do not necessarily reflect the views of my law firm, its clients, or Chapman University School of Law.