Investment Management

Contact: Albert S. Dandridge, III, Joseph J. Devine and Anthony L. Ciuca
Schnader Harrison Segal & Lewis LLP, Delaware and Pennsylvania, USA

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”). This sweeping financial reform legislation covers issues from banking and securities regulation to corporate governance. Section 413 of the Act — which takes effect immediately — modifies the net worth standard for natural persons (individuals) in the definition of “accredited investor,” as defined under Rule 501(a)(5) of Regulation D under the Securities Act of 1933 (the “1933 Act”). This may require companies to revise their private placement memorandum documents for current offerings if the sale of securities has not closed as of July 21, 2010. This Alert examines the new legislation.