Private Offerings and Public Ends: Reconsidering the Regime for Classification of Investors Under the Securities Act of 1933

43 Pages Posted: 12 Dec 2015 Last revised: 30 Jan 2016

See all articles by Jonathan Glater

Jonathan Glater

University of California, Los Angeles (UCLA)

Date Written: December 3, 2015

Abstract

Investment in private offerings of securities, those that take place off of public exchanges and that are exempt from federal disclosure rules applicable to public offerings, is primarily available to investors on the basis of wealth. The wealthy are presumed sophisticated enough to make informed decisions about what to buy without mandatory disclosures applicable to public offerings. Yet the financial crisis of 2008 made clear that wealthy and ostensibly sophisticated investors can make tremendous mistakes and suffer enormous losses. Those losses are a problem when the investor serves a public goal, such as providing income to public sector employees. This Article argues that investment in private offerings by institutions serving a public mission should be limited to ensure that public ends are protected.

Suggested Citation

Glater, Jonathan, Private Offerings and Public Ends: Reconsidering the Regime for Classification of Investors Under the Securities Act of 1933 (December 3, 2015). Connecticut Law Review, Vol. 48, No. 2, 2015, pp.355-395, UC Irvine School of Law Research Paper No. 2016-01, Available at SSRN: https://ssrn.com/abstract=2702135

Jonathan Glater (Contact Author)

University of California, Los Angeles (UCLA) ( email )

405 Hilgard Avenue
Box 951361
Los Angeles, CA 90095
United States

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