A sophisticated investor with a high net worth who is deemed to have knowledge of the investment process and understand the risks. The SEC (Securities and Exchange Commission) will permit some securities not to be registered since these individuals do not need the same protections as smaller, less sophisticated investors. Under most circumstances, federal securities law requires that companies register the securities they intend to offer with the SEC unless they can file successfully for an exemption, which would be the case with accredited investors.
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