Claim to be an Accredited Investor

Discussion in 'Trading' started by TOPNEWS, Dec 18, 2007.




    I was wondering what the consequences are if you invest in an
    "accredited investor" only investment but are not an "accredited

    Right now I have some money saved in the bank and I came upon an
    interesting investment. It is low risk and low profit but the only
    requirement is that I need to be an accredited investor.

    It seems to me that the SEC only created this category to make sure
    poor folks didn't waste all their money on risky investments. But
    seeing that I am rather young and can make the money I could possible
    lose in a couple years, I don't feel like I am gambling my life away.

    Aside of the possibility of losing my money, is there any other legal
    or tax consequences I would face? The investment firm said there is no
    way for them to check my "Accredited Investor" status and I could claim
    that I own $1 million in foreign assets.

  2. vjay


    It seems to me that it would be up to the investment firm to follow the laws of whether a person is an accredited investor.
    Speaking in general, be wary of anyone/firm that will cut corners on legal issues in order to get your money. If the deal is strictly legit there is no reason not to follow the rules/law.
    You didn't give enough details for your deal. If you know the people well then maybe it's okay. If they are strangers=Beware. Make sure you check them out thoroughly.
  3. The whole idea is that they will verify the assets.
  4. It also limits your recourse against the manager
  5. The bank may tip off IRS and they will be very interested to know about your foreign assets. Hopefully you are paying tax on it. :D
  6. Bingo!