January 26, 2011
The minimum limit for an individual to become an "Accredited Investor" and be allowed to participate in securities transactions not covered by the Securities Act is extremely too low. In today's world where pensions are no longer being offered and instead an individual must save on his/her own for retirment, has driven signficiant number of individuals net worth up to at least $1 million just in retirement savings alone. Thus there are people being included in this category whose only expierence with investing is through their company's 401k. They would be no where near the sophisticated investor to be able to understand the full impact of some of these non-registered investments. This is providing access to high risk investments to people who have little or no real understanding of these unregistered instruments.
Based on this I would strongly suggest the Commission consider a minimum of $5 million net worth as the threshold for allowing an individual to be classified as an "accredited Investor" and keep the predators away from individuals who have reached a $1 million threshold mainly because of retirement savings. Or better yet exclude retirement savings from the new worth calculation .