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ARTICLE · 28 MAY 2025

SEC Update May Ease Accredited Investor Status Verification

Caldwell Law
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A recent staff letter from the U.S. Securities and Exchange Commission (SEC) in March 2025 suggests a significant streamlining of how private funds and other issuers verify accredited investor...

United StatesCorporate/Commercial Law
Marcus Wolter
Marcus Wolter
Crystel Saraie
Crystel Saraie
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A recent staff letter from the U.S. Securities and Exchange Commission (SEC) in March 2025 suggests a significant streamlining of how private funds and other issuers verify accredited investor status in offerings that use general solicitation under Rule 506(c) of Regulation D. A new "safe harbor" for accredited investor verification utilitzing high investment thresholds and written representations is created, though it comes with important limitations and ongoing regulatory considerations.

Background: Rule 506(c) and Accredited Investor Verification

Rule 506(c), established under the Jumpstart Our Business Startups Act of 2012, allows issuers to broadly market investment opportunities, known as general solicitation, without registering the offering, provided that all purchasers are accredited investors and the issuer takes "reasonable steps to verify" that status. Historically, this verification process has been seen as burdensome, requiring issuers to review

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