Petition for Reform:
The Accredited Investor Restrictions

Breaking Down Wealth Barriers: ICAN's Fight to Reform the Accredited Investor Rule

​The Challenge

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America faces a historic wealth gap crisis, and the SEC's regulations are making it worse. While anyone can place bets on sports or play poker for money from their phone, the SEC's "accredited investor" rule effectively excludes  90% of Americans from accessing private investment opportunities—the very opportunities that have historically generated the greatest wealth for American families.

The rule requires individuals to have either $1 million in net worth or $200,000 in annual income—creating an artificial barrier between everyday Americans and wealth-building opportunities, all under the guise of "investor protection." This barrier is particularly damaging given the declining number of publicly traded companies today, leaving average investors with limited investment choices. Meanwhile, the vast landscape of private investment opportunities—including promising startups, growing private companies, and innovative ventures—remains accessible only to the wealthy.

Taking Action

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In 2022, ICAN filed a rulemaking petition urging the SEC to modernize its definition of an accredited investor. Our proposal was straightforward: replace outdated wealth metrics with criteria based on financial knowledge, experience, and qualifications. This change would maintain robust investor protection while democratizing access to private markets—a crucial step toward addressing America's growing wealth gap.

The SEC's response? Two years of silence.

This inaction speaks volumes about ICAN's crucial role as an industry watchdog. When regulatory agencies fail to act on critical issues affecting millions of Americans, ICAN steps in. We're now seeking a judicial order compelling the SEC to respond to our petition because some issues are too important to let languish in administrative limbo.

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Real Impact on Real People

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The human cost of the SEC's rigid wealth requirements extends far beyond individual investors:

• Working families are blocked from the very investment opportunities that could help them build generational wealth.

• Entrepreneurs in underserved communities struggle to raise critical early-stage funding because their networks of family and friends don't meet the SEC's arbitrary wealth thresholds.

• Communities of color face amplified barriers due to the existing racial wealth gap, with white families holding approximately $100,000 more in net worth on average.

• Small businesses lose access to capital from their most natural supporters—friends, family, and community members who understand their potential but don't meet the SEC's wealth requirements.

• Individual investors are barred from significant wealth-building opportunities while remaining free to gamble away their savings on sports betting apps.

As Brittany Davis, General Partner at Backstage Capital, points out: "Many founders rely on their immediate friends and family for critical early-stage funding—often amounts as modest as $25,000 or $100,000. Yet these friends and family members frequently fail to meet the SEC's stringent 'accredited investor' criteria." (Brittany's video testimony, along with others mentioned on this page, from our 2022 filing, is available later on this page). 

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A Cornerstone of the American Dream

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ICAN is founded on the belief that the freedom of individuals to make informed decisions about personal investments is a cornerstone of the American Dream. Our vision for reform is clear and achievable:

• Replace arbitrary wealth barriers with knowledge-based qualifications

• Create inclusive pathways for sophisticated investors regardless of net worth

• Maintain robust investor protections while expanding market access

• Align regulations with modern financial markets and technology

Why This Case Matters

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This isn't just about investment opportunities—it's about economic justice and the future of American prosperity. The private markets have created trillions in wealth over the past decades, but current SEC rules ensure this wealth accrues primarily to the already wealthy. When the SEC maintains artificial barriers to wealth creation, it perpetuates systemic inequities and stifles innovation.

As Ramona Ortega, CEO of My Money My Future, notes, the most significant wealth-building opportunities in America come from investing in or building businesses. By limiting these opportunities to the already wealthy, the SEC is effectively enshrining wealth inequality into regulatory policy.

ICAN's challenge to the SEC represents a crucial step toward creating a more inclusive financial system. Our legal action seeks not only to compel the agency to respond to our petition but to spark a broader conversation about who gets to participate in America's private markets and who gets left behind.

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Building Momentum for Change

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Our efforts are gaining traction. Senator Tim Scott's Empowering Main Street in America Act (EMSAA) demonstrates growing bipartisan support for expanding investment access. This legislation, which aligns closely with ICAN's mission, would create new pathways for Americans to qualify as accredited investors and help address the widening wealth gap.

Join Our Fight

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Your support enables ICAN to:

- Challenge outdated and discriminatory investor restrictions

- File expert briefs supporting market access reform

- Advance rulemaking petitions that promote inclusive capital markets

- Build coalitions with other advocates for financial inclusion

The SEC's outdated rules exclude not only individual investors but also entire communities, blocking them from building generational wealth and contributing to one of the greatest wealth gaps in American history. This system of artificial barriers doesn't protect investors; it protects the status quo.

Help us fight for a financial system that works for everyone, not just the privileged few. Together, we can ensure that all Americans have the freedom to make informed decisions about their financial futures and access the opportunities they need to build lasting wealth for their families.

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Thank you to our exceptional pro bono co-counsel, M. Lance Jasper, and Justina Huang from Akin Gump Strauss Hauer & Feld LLP for their outstanding work on this case. Their expertise and dedication to expanding economic opportunity have been invaluable in this effort.