Subject: File No. JOBS Act Title II
From: A Anonymous, Esq.
Affiliation: In House Lawyer at a Hedge Fund

August 18, 2012

Much has been made of the language in the bill regarding the "verification" of an investor's accredited status. From a practical standpoint, if the SEC requires issuers to obtain tax returns, W-2s, balance sheets, etc. from prospective investors, the newly enacted provisions for general solicitation will become useless. No investor is going to provide such private details to issuers. Moreover, an investor is not going to bother paying thousands of dollars in fees to their accountant or lawyer to investigate his or her accredited status and represent that status to issuers on behalf of the investor. Congress modified Section 4(2) to make it easier for issuers to raise money through private placements not more difficult.

Instead, the SEC should continue to allow the practice of investors representing their accredited status to issuers through subscription agreements. If the SEC desires more, then it should simply develop a uniform accredited status form that each investor must sign to participate in a Rule 506 offering involving general solicitation. In such a form, the investor would represent his or her accredited status under penalty of perjury. This would be an efficient and uniform method for issuers to comply with any verification requirement.