Under federal law, no securities may be sold or offered for sale unless they are registered, or there is an exception. An accredited investor is one such exemption: certain high-net-worth individividual, as defined in Rule 501 of Regulation D who may purchase certain unregistered securities.
Definition from Nolo’s Plain-English Law Dictionary
A high-net-worth investor who is permitted to invest in certain types of higher risk investments without the securities being registered with the U.S. Securities and Exchange Commission (SEC). Under federal securities law, a company that offers or sells its securities must register the securities with the SEC or find an exemption from the registration requirements. Selling to accredited investors is one such exemption. The term generally includes wealthy individuals and organizations such as corporations, endowments, or retirement plans.
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:10 pm