Accredited Investor Reform
Breaking Barriers to Build Opportunity: ICAN's Fight to Reform the Accredited Investor Rule
ICAN Leads the Way on Accredited Investor Reform
At ICAN, we believe all Americans should have the freedom to invest in their own futures. Yet under the SEC’s outdated Accredited Investor Rule, the vast majority of everyday Americans are locked out of the most promising and potentially transformative investments—solely because they don’t meet arbitrary income or net worth thresholds. This exclusionary framework does more than limit financial freedom—it entrenches economic inequality by reserving early-stage, high-growth investment opportunities for the already-wealthy.
Private companies now remain private far longer—often over a decade—meaning the bulk of wealth creation occurs before the average investor has any access. At the same time, the number of IPOs has declined significantly, further shrinking the set of investment options available to the general public. The result is a system that doesn’t protect investors—it sidelines them, cutting them off from the very opportunities that could help build generational wealth.
The Accredited Investor Rule doesn’t just harm investors. It also restricts the flow of capital to small businesses and startups, particularly those led by founders without existing wealth or elite networks. It’s a double-edged sword: many Americans are blocked from investing in their own communities, and entrepreneurs are denied the funding they need to grow and thrive. Regulatory overreach like this fuels a cycle where access to capital—and the economic mobility it creates—is reserved for a privileged few.
ICAN is committed to changing this. Through direct litigation, including our lawsuit against the SEC, and through ongoing public advocacy, we are advancing a fair, modernized framework for investor access. Our reform efforts call for a definition of "accredited investor" based not on wealth, but on knowledge and informed choice. The goal is to break down artificial barriers and empower more Americans to support and participate in the innovation economy.
Financial freedom is not a privilege. It is a fundamental cornerstone of American values—and a critical component of an economy that works for everyone. ICAN is working to ensure that access to investment opportunities is based on capacity, not capital.
Our Work Towards Reform
1. Petition for Rulemaking (November 2022)
ICAN formally petitioned the SEC to modernize the Accredited Investor Rule, urging the agency to replace rigid financial thresholds with criteria focused on knowledge, sophistication, and risk awareness. The petition called for a regulatory approach that empowers investors rather than restricts them. Despite the SEC’s legal obligation to respond, the agency remained silent for more than two years.
2. Legal Action Against the SEC (December 2024)
After prolonged and unjustified inaction from the SEC, ICAN filed a petition for a writ of mandamus in the Ninth Circuit Court of Appeals. The lawsuit seeks to compel the SEC to fulfill its statutory duty to address our 2022 petition. This case underscores the importance of regulatory accountability and the urgent need to remove unjustified restrictions on investor participation.
3. 2025 SEC Action Plan (January 2025)
ICAN’s 2025 Action Plan outlines a comprehensive vision for capital markets reform, with a central focus on modernizing the Accredited Investor Rule. The plan advocates for expanding investor eligibility based on education, experience, or certification—rather than net worth—to unlock capital formation and broaden economic opportunity.
4. Wall Street Journal Letter to the Editor (April 2025)
In a widely read letter published by The Wall Street Journal, ICAN President Nick Morgan critiqued the SEC’s paternalistic approach to investor access. He argued that Americans should have the freedom to invest in high-potential private ventures, rather than being constrained by outdated assumptions about their financial judgment.
5. Congressional Advocacy (April 2025)
ICAN submitted formal recommendations to the U.S. House Financial Services Committee, advocating for investor choice and capital access. These recommendations stressed the need to revise the Accredited Investor Rule to reflect real-world investor capabilities and to support capital formation among underserved entrepreneurs.
6. ICAN Warns HR 3994 Will Lock Investors Out, Not Let Them In (July 2025)
ICAN publishes an expert analysis opposing H.R. 3394 because, despite claims of expanding investor access, the bill entrenches outdated wealth-based thresholds and restricts the SEC's ability to modernize the definition of “accredited investor.” Rather than empowering investors, it narrows eligibility, imposes unnecessary bureaucratic hurdles, and risks locking in a two-tiered financial system. ICAN believes true reform should be grounded in investor knowledge, transparency, and choice—not arbitrary financial metrics.
