The Securities and Exchange Commission is moving to give ordinary investors far greater access to hedge funds and potentially risky private stock offerings, an action that's drawing fire from consumer advocates, unions and Democrats, Politico reported. The proposal adopted yesterday would make it easier for individuals to tap into funds that are exempt from SEC registration by loosening the definition of what constitutes a sophisticated investor, a category now confined to high net worth people deemed savvy enough to handle more advanced financial products. These individuals, known as "accredited investors," have special access to lucrative — and more uncertain — products such as hedge funds, certain private equity investments and private placements, where stocks or bonds are sold outside a public offering and subject to few SEC regulations. The proposal, which would create a new pool of investors for private offerings, underscores a broader trend across regulatory agencies in the Trump era to modify rules for the benefit of industry. Just last month, the SEC proposed placing proxy advisory firms — which make recommendations to shareholders on such thorny issues as executive pay and climate change — under a tighter grip by regulators, a big win for the industry.
