SEC Chairman Jay Clayton wants to allow mom-and-pop investors to put their money in private companies, according to a Wall Street Journal interview.
Mr. Clayton said the agency was looking into changing the rules around private investing by individuals, but it’s not clear yet what new guidelines would look like. Currently, most investments in private companies such as Uber and Airbnb are only open to investment firms and individual “accredited investors” who meet certain minimum thresholds for income or wealth.
The potential benefits of allowing less wealthy investors into the ballooning private markets include broader participation in wealth creation, and greater access to capital for startups. But there would obviously be more potential for fraud and risky bets made by less sophisticated investors, considering how little transparency there is in private investments.