ACCREDITED INVESTORS - Clarification Since I h

ACCREDITED INVESTORS - Clarification

Since I have been banned from that ~other~ board, I do occasionally sneak a peek at what some of the bashers are saying. One of them had made a snide comment about having to be "an accredited investor" in order to get the RFMK business plan. It helps to understand what the term means so that people will not be mislead by basher posts that imply Cheryl is attempting to "withhold information".

Many average investors, meaning those who buy individual stocks, do not fall into the classification of "accredited investor", as it is a term specified by Rule 501 of Regulation D.

This rule came into effect by way of the Securities Act of 1933 as stated below:

"The federal securities laws define the term accredited investor in Rule 501 of Regulation D and as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act as:

1. a bank, insurance company, registered investment company, business development company, or small business investment company;


2. an employee benefit plan, within the meaning of the Employee Retirement Income Security Act , if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;


3. a charitable organization, corporation, or partnership with assets exceeding $5 million;


4. a director, executive officer, or general partner of the company selling the securities;


5. a business in which all the equity owners are accredited investors;


6. a natural person who has individual net worth, or joint net worth with the person's spouse, that exceeds $2 million at the time of the purchase, or has assets under management of $1 million or above ^{[ 2 ]} , excluding the value of their primary residence; ^{[ 3 ]}


7. a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or


8. a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes." ^{[ 1 ]}

Cheryl, being well-versed in business, was NOT withholding any information by her statement that RFMK's business plan was available for months to "Accredited Investors".  She was specifically referring to those investors, which mainly involves financial and investment institutions, that such information would be shared with those companies and firms fitting that specific classification.

Those who would criticize her for withholding investor information demonstrates their obvious lack of knowledge regarding the securities industry.