Forbes – According to the American Federation of State, County and Municipal Employees, the average AFSCME member earns $45,000 per year and receives a pension of about $19,000 upon retirement. The notion that these workers are “sophisticated investors” who can understand the risks and merits of complex investment products that may not be legally offered to the general public, such as private equity and hedge funds, seems ludicrous.
Under the SEC’s more restrictive “accredited investor” standard, individuals with a net worth of more than $1 million, or an income above $200,000 for individuals and $300,000 for couples, can be sold a variety of unregistered investments, such as hedge funds and private placements of shares in a company. These one-percenters are presumed by regulators (rightly or wrongly) to have enough financial knowledge and wherewithal to dance with the wolves on Wall Street.
