September 25, 2012
Self Certification of Accredited Status
For the past several decades broker dealers have relied on subscription agreements drafted by experienced securities attorneys which included self certification of accredited status. In that time I am unaware that investors certifying as being an accredited investor but not being one has proven to be a problem of any significance. There have been none in my experience.
The intent of Congress in the JOBS Act is to expand the ability of early stage companies to raise funds by doing away with the prohibition against general solicitation. If the SEC considers self certificaton inadequate to demonstrate being an accredited investor, including self certification by persons who have previously done such investing, would not the SEC be defeating the purpose of that portion of the JOBS Act? by making such investments more difficult?
Would it not be better to allow self certification for the time being and see if a significant problem develops?