February 24, 2007
For two and a half centuries, this country has prided itself on internal growth through market investment. It has stood for the "American Dream" of developing a good or excellent standard of life through building the future.
That future was never meant to be only for the ultra wealthy.
To raise the capital ownership requirements under the definition of "accredited investor" to $2.5MM to be adjusted further for inflation is patently discriminatory and geared to limit the potential for anyone in the population to participate in the growth of wealth through investment.
There is a continuing need to protect against such threats as fraud and misrepresentation. And while it is fully understood, that people of lesser net worth can suffer greater harm when an investment loses value, it should remain their free choice. The emphasis rather should be upon those seeking investment to provide full and complete disclosure without misrepresentation. Perhaps stiffer penalties should apply (even criminal) where such disclosure is not forthcoming and results in damages. This potential harm, however, does not create the environment where the protection should outweigh the benefit of having open and available investment mechanisms.
To change the "value" requirements in the accredited investor definition to above their current levels will significantly impact the demographics of eligible investors and unfairly create an imbalance for the ultra wealthy.
This is not the basis of American capitalism or the the American dream. Let the market dictate who can invest. Promote rather people building wealth rather than dictating who can.