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Private Markets & Investor Verification under the JOBS Act

In this interview, ACE Portal’s CEO, Peter Williams, interviews Daniel Gorfine, the Milken Institute’s Director of Financial Markets Policy and Legal Counsel, on how the JOBS Act (and specifically the provisions around 506(c) and General Solicitation) has created a new significance around the definition of what it means to be an accredited investor. Their conversation is important for any company thinking through whether to use Rule 506(c) which allows you to mass market–or generally solicit–and some of the special considerations that need to be thought through around the heightened investor suitability requirements to be found there. This dialogue takes on added significance because the SEC is revisiting the definition of an accredited investor this year under the requirements of Dodd-Frank. This video is closely related to Joe Bartlett’s discussion of suitability and verification as well as his in-depth post on how to actually certify accreditation.

Some of the specifics of this conversation include:

    • Safe Harbors and verification requirements such as: Tax Returns, Bank Statements, and other types of documentation/additional proof
    • Whether self-attestation is still the valid framework or if it now superseded by third party verification
    • Specifically, the idea of whether income or net worth is even a good proxy for sophistication of an investor and what could be better
    • Whether liability and suitability issues will lead the market to remain very institutional
    • Daniel’s specific idea about how to alleviate both investor verification and suitability in one fell swoop (you’ll have to watch to find out what it is!)

Additional Interviews with Daniel Gorfine


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