Subject: File No. 4-692
From: Jeff Carlsen, CPA

January 17, 2017

I would support an update to broaden the definition of "accredited investor" to allow education and professional credentials to qualify one for the designation.

I hold a Masters in Accountancy and have been an active CPA for 10 years. In my formal education, I had classes in corporate finance, investing, derivatives, and other similar courses. In my professional career, I've drafted SEC financial filings for large corporations and audited the financials of dozens of other companies. However, under current definitions, I'm unable to participate in private offerings, even though I possess the education and experience to understand the terms and risks, and to evaluate an investment.

On the other hand, there are professional athletes, lotto winners and pop stars that have no financial education, but they qualify as accredited investors because they meet the financial thresholds. I have nothing against wealthy individuals losing their money because they didn't understand how to read a term sheet, but the current rules leave out a huge number of sophisticated individuals that are capable of deciding where and how to invest their assets.

I would like the definition to encompass a broad base of financially literate individuals. No, not just individuals that hold securities licenses, or any other narrowly-defined set of professionals. I think the measure needs to be broader to include those that have other financial professional designations (such as CPAs) or a business-related college degree, for example. Such backgrounds should be a green-light indicator that a person possesses much of the fundamental knowledge to allow them to evaluate an investment opportunity.