# Accredited investor

`kaal:entity:accredited-investor`

**Status.** derived

This node is assembled mechanically from the 7 claims that carry the concept tag `accredited-investor`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself.

## Every claim under this term

7 claims across 4 works, 2009 to 2017.

**2009**

- [1428387-020](https://wulfkaal.github.io/claims/1428387-020) [mechanism/argued] *(failure mode)* -- The Commodity Exchange Act family and friends exemption allows a qualifying manager to trade options and futures for fifteen individuals who need not be sophisticated or qualified investors, which circumvents accredited investor standards and admits retail investors into hedge funds.
  > "families and friends" program, he or she will be able to trade options and futures for 15 individuals who will not have to qualify as sophisticated or qualified investors. This helps to circumvent accredited investor standards and allow retail investors into hedge funds.
  Kaal, Hedge Fund Valuation Retailization, Regulation, and Investor Suitability (2009). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1428387
- [1428387-030](https://wulfkaal.github.io/claims/1428387-030) [condition/argued] *(failure mode)* -- Unless an investor's business is primarily to invest in hard-to-value assets, that investor's sophistication cannot be assumed regardless of personal wealth.
  > Unless the business of an investor is to primarily invest in certain hard-to-value assets, the sophistication of such investor can probably not be assumed, regardless of personal wealth. Investors who could
  Kaal, Hedge Fund Valuation Retailization, Regulation, and Investor Suitability (2009). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1428387
- [1428387-031](https://wulfkaal.github.io/claims/1428387-031) [failure/argued] *(failure mode)* -- Raising the Regulation D numerical tests by adding an investable assets requirement would probably not address how to remedy investors' lack of understanding of hard-to-value assets.
  > raising the numerical tests by adding an investable assets requirement236 would probably not address the question of how the lack of understanding of certain hard-to-value assets could be addressed.
  Kaal, Hedge Fund Valuation Retailization, Regulation, and Investor Suitability (2009). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1428387

**2011**

- [1806252-032](https://wulfkaal.github.io/claims/1806252-032) [failure/argued] *(failure mode)* -- The numerical wealth requirements used to define qualified hedge fund investors fail as a regulatory device, because investors who meet the wealth thresholds do not always have the knowledge, understanding, and sophistication needed to invest in highly complex financial instruments.
  > The policy fails to take into account investors who technically fulfill the numerical wealth requirements but lack an adequate level of financial sophistication.
  Kaal, Hedge Fund Regulation Via Basel III (2011). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1806252

**2016**

- [2811729-016](https://wulfkaal.github.io/claims/2811729-016) [condition/argued] -- If a private fund's offering process successfully limits its investors to accredited investors or qualified purchasers, the retail investor protection principles of the Company Act do not apply to the fund's trading, operation, and governance.
  > Accordingly, if a private fund's offering process successfully limits its investors to either "accredited investors" or "qualified purchasers," the retail investor protection principles of the Company Act will not apply to the private fund's trading, operation, and governance.
  Wulf A. Kaal, Unconstrained Mutual Funds and Retail Investor Protection (2016). SSRN: https://ssrn.com/abstract=2811729
- [2811729-021](https://wulfkaal.github.io/claims/2811729-021) [mechanism/argued] -- Among the factors driving unconstrained mutual fund growth, the Dodd-Frank Act decreased the number of eligible private fund investors by raising the minimum net worth requirement for individuals to qualify as accredited investors.
  > Second, the Dodd-Frank Act decreased the number of eligible private fund investors by raising the minimum net-worth requirement for individuals to qualify as "accredited investors,"
  Wulf A. Kaal, Unconstrained Mutual Funds and Retail Investor Protection (2016). SSRN: https://ssrn.com/abstract=2811729

**2017**

- [2998097-010](https://wulfkaal.github.io/claims/2998097-010) [design/argued] -- Investor suitability standards requiring independent verification of an investor's ability to evaluate complex financial products and investment risk would make wealth redundant as a proxy for sophistication in determining investor eligibility.
  > Such proposed investor suitability standards would require independent verification of investors' ability to evaluate highly complex financial products and investment risk, rendering wealth as a proxy for sophistication redundant for investor eligibility.54
  Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097

## Verify

Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust.

    curl -s https://wulfkaal.github.io/entities/accredited-investor.md | sha256sum

**Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.