Reading up about requirements for investment in start-ups, I saw this tidbit:

http://www.sec.gov/answers/accred.htm

Quote :

"Under the Securities Act of 1933, a company that offers or sells its securities must register the securities with the SEC or find an exemption from the registration requirements. The Act provides companies with a number of exemptions. For some of the exemptions, such as rules 505 and 506 of Regulation D, a company may sell its securities to what are known as "accredited investors." The federal securities laws define the term accredited investor in Rule 501 of Regulation D as:"

Now I'm naive, but apparently the government decides that you may sell shares to someone if they fit the accredited investors definition. Or maybe they just don't have to "register the securities" if the investor is accredited.

Just first impression, but... I imagine a company would rather sell shares to someone they didn't have to register the transaction for.

oh, but here's the good part:

Quote :

"a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes. "

Dear government,

I like to give you the benefit of the doubt. I really do. But one would think that, you know, just maybe, maintaining a definition of "accredited investor" almost identical to the OWS 1% definition, and giving that group of accredited investors special privileges that the rest of us do not have... probably goes just a little too far with the nepotism. Just a little.

I would like to argue in your favor against all these dirty liberals and libertarians, saying that you don't actually pull favors for the privileged class. It would make it a lot easier to do that if you would give your laws and regulations a good scrubbing first. The extra effort to identify a person as a natural person is a nice touch. No really, I wish that was put in there as a joke but I know it wasn't.

Yours in patriotism,
mrfrog

2/13/2012 9:51:45 AM

The point of this is to reduce money flowing into and out of scam corps. The metrics accreditation roughly serve as a proxy for determining whether you're being roped into a scam either by a shell corporation or some individual con man. Note the two-year income requirements and "reasonable expectation..." parts you didn't bold, as well as the "natural person" requirement. This is to curb laundering and pyramid schemes.


[Edited on February 13, 2012 at 10:46 AM. Reason : .]

2/13/2012 10:45:25 AM

Only government-backed (or government-run) pyramid schemes are allowed.

2/13/2012 10:48:46 AM

Can you just let 1 thread go for more than 3 posts without becoming your generic anti-government screed.

2/13/2012 10:57:25 AM

Quote :

"Note the two-year income requirements and "reasonable expectation..." parts you didn't bold"

Now this is just plain incoherent.

No shit they have a requirement that you made that money for some # of years. You have to define an objective criteria in order to classify people by income line. If you're trying to define a line of people making over XXX amount, you can just let someone say "oh yeah, I'm pretty sure I'll make that much this year".

I know that the government excludes 99% of the American population from the high-yield and high-risk investment market in order to "protect" them. If you want to play with the little fish then you have to get certified that you can handle them gently. I know.

The point - the problem - is that the little fish are supposed to have opportunity. The little fish are supposed to have the ability to band together and out-compete the big fish. It's not as easy to do if you're only allowed to work with the soft handed attendants.

2/13/2012 11:00:21 AM

Quote :

"The little fish are supposed to have the ability to band together and out-compete the big fish. "

Lmao and what if the big fish band together

2/13/2012 11:02:01 AM

I'm pretty flabbergasted that you're just hunky-dory with the 1% having more rights than the rest of us.

2/13/2012 11:04:07 AM

Capitalism guarantees that. Sorry if I don't get huffy and puffy over a few of them being codified officially.

2/13/2012 11:10:27 AM

DUDE, all it's saying is that a person is exempt from registration.


You can still do anything that a $200,000+ person can do, the SEC just has to have your information on file.




[Edited on February 13, 2012 at 12:37 PM. Reason : .]

2/13/2012 12:26:31 PM

S-E-C!

S-E-C!

S-E-C!

2/13/2012 1:20:26 PM

Quote :

"Capitalism guarantees that. Sorry if I don't get huffy and puffy over a few of them being codified officially."

...and facepalm.

2/13/2012 3:03:18 PM

don't worry the trickle down economics will encourage the job creators to express their freedom with small goverment out of the way... blah blah blah [insert more republican talking points] Reagan smash!



[Edited on February 13, 2012 at 3:34 PM. Reason : hooray buzzwords mashed up and making no sense]

2/13/2012 3:47:17 PM

Quote :

"The point of this is to reduce money flowing into and out of scam corps. The metrics accreditation roughly serve as a proxy for determining whether you're being roped into a scam either by a shell corporation or some individual con man. Note the two-year income requirements and "reasonable expectation..." parts you didn't bold, as well as the "natural person" requirement. This is to curb laundering and pyramid schemes."

I'm curious, but how did you arrive at these conclusions? If the intent is to to "reduce money flowing into scam corps" then it doesn't make a lot of sense that there would be any limit. Are you trying to imply that the government has picked an arbitrary number below which it is assuming the people are too stupid with their own funds to be trusted to by offered securities?

2/13/2012 8:44:49 PM

I don't know how this is used to make money unfairly, all I know is that it IS used to do that.

2/13/2012 9:25:56 PM

I too, get extremely annoyed at the dominance of the South Eastern Conference over NCAA Football.

2/13/2012 9:44:57 PM