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While the sec defined the large investors able to

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Unformatted text preview: This allowed large investors to begin trading these privately placed securities among themselves even though, in general, privately placed securities do not satisfy the stringent disclosure and informational requirements imposed by the SEC on approved publicly registered issues. While the SEC defined the large investors able to trade privately placed securities as those with assets of $100 million or more—which excludes all but the very wealthiest household savers—it is reasonable to ask how long this size restriction will stay in effect. As they get more sophisticated and the costs of information acquisition fall, smaller savers will increasingly demand access to the private placement market. In such a world, savers would have a choice not only between the secondary securities from FIs and the primary securities publicly offered by corporations but also between publicly offered (registered) securities and privately offered (unregistered) securities.23 The recent growth of the 144A Private...
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