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February 7, 2023

House Financial Services Committee Should Strengthen the Accredited Investor Protections to Prevent Investors from Being Ripped off in Dark Private Markets

WASHINGTON, D.C.— Dennis M. Kelleher, President and CEO, issued the following statement in connection with a Better Markets fact sheet released ahead of a House Financial Services Committee hearing that will likely consider harmful changes to the Accredited Investor definition:

“The Accredited Investor definition protects many investors from being ripped off in private markets where there is very little disclosure, transparency, or protections.  It helps ensure that Main Street investors putting their hard-earned money at risk in a private offering are those who can evaluate the merits of the investment with very limited information and those who have the financial resources to sustain large losses without catastrophic consequences in their lives. As the House Financial Services Committee considers changes to the standard, it should remember that weakening the Accredited Investor test isn’t democratizing access to wealth; it’s making many more investors vulnerable to fraud, abuse, and financial loss.

“The core investor protection in the public securities markets is the requirement that companies seeking investors’ money must make comprehensive disclosures to the public of all material information.  That must be complete and accurate, or investors can sue for fraud.  That framework has proven enormously successful protecting investors for almost a century, allowing our securities markets to become the envy of the world and fueling the most robust economy on the planet.  While the law also allows for private offerings, they come with far less disclosure, fewer safeguards, and higher risks.  Worse, they often inflict huge losses on investors, and the Accredited Investor definition at least reduces the number of potential victims.

“Those who seek to make high-risk private offerings more widely available haven’t made credible, factual arguments to support change.  Investors aren’t clamoring for more access; legitimate companies already have access to capital; and there isn’t reliable data showing that a weaker Accredited Investor test would do anything other than expose more investors to losses.  What the SEC should do is strengthen the Accredited Investor test by adjusting its dollar thresholds to catch up with 40 years of inflation, so it can better serve its protective purpose as intended.”

You can find the Fact Sheet here.


Better Markets is a non-profit, non-partisan, and independent organization founded to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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