Investor Home Equity to be Excluded from $1 Million Minimum Net-Worth Requirement for Accredited Investors

Today, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2009. Now, brokers will have a much harder time justifying the sale of private placements to small investors. Effective as of July 21, 2010, an investor’s primary residence will no longer be considered when attempting to qualify for the $1 million minimum net-worth requirement for accredited investors under Rule 501(a)(5) of Regulation D. Also, one year from the date of enactment, the SEC will undertake a review of the “accredited investor” definition to determine whether any other requirements should be implemented for the “protection of investors, in the public interest, and in light of the economy.”

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