If a poor person manages to scrape together $100, shouldn't they be allowed to invest it in any way they choose? According to the SEC and many state laws, the answer is a paternalistic and resounding NO!
According to the Securities Act of 1933 (amended by Dodd-Frank in 2010), you have to earn AT LEAST $200,000 annually for the last two years (so $400k over two years) AND have assets that exceed one million dollars. To make matters worse, that 1 million dollar threshold does NOT include your primary residence.
So, unless you have one million dollars in the bank AND make over $200k per year, you're frozen out of the most lucrative investments available in the economy.
Why does Regulation D exist? The excuse given by the swine lawmakers who support this paternalistic poppycock is: to protect the poor from having their money taken in bad investments.
Think about that for a moment. The legislators who support this scheme, all of whom are part of the "investor class", and were probably born qualifying as "accredited investors", think it's totally fine to relegate the poor and middle class to minuscule returns on CDs and savings accounts, but they absolutely forbid you to buy into an IPO or participate in peer-to-peer lending. They're also fine allowing a middle class person to lose their shirt in the stock market, but they reserve the really profitable stuff for themselves.
This, along with the capital gains scam, is a big part of the wealth disparity in this country. The "investor class" has created a system by which they reserve the really profitable deals for themselves, and leave everyone else to feed on their table scraps AND to pay all the taxes. It's a fucking disgrace.
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