June 20, 2019
Regarding the accredited investor rules, I would propose that instead of focusing upon the wealth of the investor, attention should be focused upon providing more useful information to potential investors that they will actually understand and will help them make better investment decisions, because I believe that is the best way for the SEC to carry out its mission.
Currently, the information provided to investors in any exempt offering is nearly useless. Private placement memorandums typically do not contain any information that is helpful from an investment decision-making standpoint. Instead, they are a laundry list of risk factors and far too much irrelevant information that serves no purpose other than to shield the issuers from liability (and also to enrich the lawyers--like myself--who prepare them).
Simply stating, "You are an idiot if you invest in this cockamamie scheme because you are going to lose everything you put into it, but if you still insist, please only invest an amount that you won't even notice is missing if the investment drops to zero," would be far more useful than the average PPM.
I would therefore propose more statistical data be collected and made available to prospective investors for all exempt offerings, perhaps via a streamlined registration process that relied on something like blockchain technology to ensure that data collected cannot be manipulated by issuers and having other safeguards in place that do not require the issuers to conduct a separate raise just to pay the costs associated with independent auditors, lawyers, etc.
In order to be effective, the data would have to be accessible and easily searchable, so, for instance, prospective investors could search a database that showed all exempt offerings in the past 5 years that met criteria similar to ones they were considering investing in. Basically, just a subset of the most important data collected from public reporting companies.
That's all I've got. Thanks for the opportunity.