Securities Regulation Daily Wrap Up, EXCHANGES AND MARKET REGULATION—N.D. Tex.: Accredited investor rule prevents savvy, experienced people from investing, complaint argues, (Sep 10, 2025)

By Rebecca E. Hoffman, J.D.

In her lawsuit against the SEC, the plaintiff seeks a ruling that the “Financial Restriction Rule” within the accredited investor requirements is contrary to law.

The SEC’s accredited investor rule’s financial restriction, which requires that an investor have a minimum net worth or salary to qualify as an accredited investor, has served to prevent a leader in the healthcare field from investing in the very fund she advises, driving her to file a complaint seeking a ruling that the provision is arbitrary and capricious and should be set aside (Kapszukiewicz v. SEC, No. 4:25-cv-975 (N.D. Tex. filed Sept. 8, 2025)).

Financial floor. To qualify as an accredited investor, pursuant to 17 C.F.R. § 230.501(a), an investor must have an annual salary of at least $200,000 for the past two years or have a net worth over $1 million. According to the complaint, plaintiff Emily Kapszukiewicz’s net worth is $850,000 and she earns $195,000 annually. Therefore, she falls short, even though she is experienced in “strategic initiatives, financial modeling, and business transformation, including identifying over $300 million in potential patient revenue at a healthcare services company,” and “has demonstrated financial sophistication through creating price elasticity models, conducting enterprise-level financial analyses, and developing economic frameworks that measure customer lifetime value in healthcare settings.”

Co-plaintiff Healthcare Shares, P.B.C., operates a venture capital fund that invests in healthcare startups. Healthcare Shares has an interest in having Kapszukiewicz invest, given her extensive healthcare and financial expertise and the fact that she shares the public benefit corporation’s aims to improve public health. The plaintiffs assert that the financial restriction, which is meant to protect the investor, excludes individuals like Kapszukiewicz who are not sufficiently wealthy to qualify but are nevertheless savvy investors.

Healthcare Shares appointed Kapszukiewicz as CEO of one of its fund’s portfolio companies, a provider of mental healthcare services. “Her appointment as the CEO underscores the fund managers’ confidence in her ability to lead a portfolio company and evaluate investment opportunities in the healthcare sector,” the complaint explained, but she cannot “invest[] her own capital in the same opportunities she was deemed qualified to evaluate and lead professionally.”

Wealth gaps. The complaint observed that those who qualify as accredited investors under the current regime are disproportionately white and concentrated in coastal metropolitan areas. Moreover, there is data to show that “modest adjustments to capital-raising rules can create greater opportunities for new and diverse entrepreneurs without removing any safeguards.” Because the SEC’s rules do not permit someone with demonstrable market smarts to invest, “the SEC has abandoned the balance between capital formation and investor protection that Regulation D was created to achieve.” In fact, Kapszukiewicz suffered losses from her retirement account, and if she had the ability to diversify her investments and choose those she had the knowledge to evaluate, she would have fared better. “[H]er values-based career choices effectively barred her from participating in healthcare innovation as an investor, despite being deemed qualified to lead it as an executive,” the complaint said.

The complaint also pointed out that the SEC did not conduct assessments to measure the impact of the thresholds the rule imposes, noting that statutory rulemaking requirements demand such efforts.

The plaintiffs seek a ruling that the financial restriction of the accredited investor rule is not in accordance with law, is arbitrary and capricious, exceeds statutory limitations, unlawfully suppresses the plaintiffs’ speech and association, and violates equal protection in that it is not rationally related to investment sophistication. They ask that the restriction be declared unconstitutional, vacated, set aside, and remanded.

Executive order. A Trump administration executive order issued Aug. 7—which directs the DOL and other federal financial regulators to mull how their regulations may be revised to allow employee retirement savers who contribute a portion of their earnings to 401(k) plans to gain exposure through those plans to alternative assets such as private equity investments, real estate investments, and digital assets—also calls the accredited investor rule into play. The EO directs the SEC to update regulations in order to facilitate access to alternative assets, which could include changes to the parameters of accredited investor status.

The case is No. 4:25-cv-975.

Attorneys: Drake Rayshell (Gray Reed) for Emily Kapszukiewicz and Healthcare Shares, P.B.C.

Companies: Healthcare Shares, P.B.C.

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