SEC’s Private Accredited Investor Rule Draws Legal Challenge

The Securities and Exchange Commission’s rule that requires financial minimums for private investment opportunities widens wealth disparity and should be struck down as arbitrary and capricious, an investor told a federal court in Texas.

“While anyone can place bets on sports or play poker for money from their phone, the SEC’s ‘accredited investor’ rule, effectively excludes the vast majority of Americans from accessing private investment opportunities—the very opportunities that have historically generated great wealth for American families,” said the complaint filed Monday in the US District Court for the Northern District of Texas.

The challenge, by a health-care executive and ...