February 16, 2016
Alternative Investment Assurance Partner Art Brown was interviewed by the Wall Street Journal's Morning Risk Report, about the importance of properly vetting accredited investors.
By Nicholas Elliott
Individual investors have freer access to private offerings of securities thanks to the 2012 Jumpstart Our Business Startups Act but that doesn't mean regulators are turning a blind eye to who is being admitted to such investments. ThinkAdvisor reported last week on comments by Securities and Exchange Commission Chair Mary Jo White that there are investigations underway into whether issuers are doing enough to make sure they're limiting access to only "accredited investors" or those meeting income and wealth thresholds.
Arthur Brown, a partner with accounting and advisory firm Marcum LLP, said that among firms raising money for "alternative investments"—primarily hedge funds, private equity and private real estate–there's more focus on raising capital than vetting its origins. "There's a propopensity to get money in and sort things out as they go along," he said. Mr. Brown said registered investment advisers tend to have stronger compliance than unregistered firms.