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SEC Opens Gates to Accredited Investor Status—and Draws Rebuke, Financial Planning

August 26, 2020

Morgan Lewis partner Christine Lombardo spoke with Financial Planning after the US Securities and Exchange Commission (SEC) adopted amendments to the “accredited investor” definition. The article explains how the new amendment seeks to eliminate the notion that merely having wealth indicates knowledge of the markets and “financial sophistication.”

According to Christine, the wealth requirement had prevented some advisors from investing in the private funds they were recommending to clients. She said if advisors can recommend to their clients to invest in private equity, “it seems counterintuitive that they wouldn't themselves be able to assess the risks associated with investing in a pooled investment vehicle.”

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