SEC Modernizes the Accredited Investor Definition
These are good steps, but abolishing all wealth-tests entirely would still be better.There's no wealth-test that prevents a person from losing all their money in highly-leveraged investments - from real-estate to fancy public-market securities. (Over-leveraging into real estate is practically encouraged by public policy.)There's no wealth test against putting all one's cash into gambling, which can be arbitrarily worse than even the riskiest non-fraudulent startup investment, depending on your choice of wagers. (Official state lotteries are among the worst games, with the most manipulative marketing - to a level of deception that would generate lawsuits & legislation if attempted by private actors.)There's no wealth test before purchasing legal but addictive & judgement-impairing substances like alcohol & marijuana.But if you want to put $5-$20K into a friend's business, or a business you know well, the SEC makes it hard unless you're already a millionaire. It's insanely paternalistic & economically destructive - a ghostly holdout from some bad experiences in another era, the 1930s, when the ranges of available information, experience, and alternative temptations were all tiny & quaint compared to the 2020s.