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