Fraud is not limited to the uninitiated or the new investor, in fact, fraud victims include bankers, hedge funders and other financially-sophisticated individuals whom, presumably, should be able to sniff out bogus investment schemes. Bernie Madoff alone, for example, fleeced more than 8,000 well-heeled professionals in his twenty-year-long Ponzi scheme.
The enactment of the JOBS Act marks a transformative period for the private capital markets, as it has made significant changes to the landscape of the federal securities laws.
Accredited investors are most commonly introduced to securities regulation today through participation in offerings made under Rule 506 of Regulation D under the federal Securities Act of 1933.
Without experience or a significant amount of time spent studying how various investment vehicles work, chances are you, the average accredited investor, will need to locate a financial advisor who can help direct and manage your investment.
A private placement is a non-public offering of securities exempt from full SEC registration requirements. Placements are usually made directly by the company issuing stock, but they may also be made by an underwriter. The offering may be of debt or equity.
We read with interest the Economic Analysis section of the Commission’s final rule eliminating the prohibition against general solicitation and advertising in Rule 506 and Rule 144A offerings. We think the rule is a good one notwithstanding that its critics have valid concerns that must be addressed by the SEC, and which inevitably will also be addressed by market forces.
SEC lifts the ban. Time to re-think your portfolio?
The very point of being an accredited investor is that there is a whole world of alternative investment opportunities available to you that are not available to non-accredited investors.
On March 6, 2013, NASDAQ OMX Group, Inc. announced a joint venture with SharesPost, Inc. to launch a new secondary market trading platform for the purchase and sale of private company securities. The new marketplace, to be called The Nasdaq Private Market (NPM,) will be a private market for resales of restricted securities, with the main objective of providing increased liquidity for early investors, founders, and employees of private companies by enabling the efficient buying and selling of private company shares. Subject to regulatory approval, NPM is slated to become operational later in 2013. The new private trading platform presents an opportunity for accredited investors who have held restricted securities of a private company for at least one year to exit their investments.
FundersClub is a new type of venture capital platform, built around a unique online marketplace that allows accredited investors to become equity holders in FundersClub-managed venture funds – which then fund pre-screened, private companies. AIMkts spoke with CEO Alex Mittal about all things FundersClub to get some insight into why they’re industry wave makers right out of the gate, among other things.