• Private Placement Update: SEC Proposes Changes to the Net Worth Standard for Determining Accredited Investor Status
  • February 16, 2011
  • Law Firm: Shearman Sterling LLP - New York Office
  • On January 25, 2011, the Securities and Exchange Commission (“SEC”) proposed amendments to its rules to conform the definition of “accredited investor” to the requirements of Section 413(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”).1 Section 413(a) became effective upon the enactment of the Dodd-Frank Act on July 21, 2010 and requires that the definitions of “accredited investor” in the Securities Act of 1933 (the “Securities Act”) rules to exclude the value of a person’s primary residence for purposes of determining whether the person qualifies as an “accredited investor” on the basis of having a net worth in excess of $1 million.