Hedge fund managers and other issuers who wish to offer securities in reliance on the exemption from registration set forth in Rule 506(c) of Regulation D under the Securities Act of 1933 (Securities Act), must take “reasonable steps” to verify that each of the investors is an “accredited investor.”  The main attraction of a Rule 506(c) offering is that it is not subject to the traditional ban on general solicitation and advertising in private offerings.  Rule 506(c) contains a number of safe harbors covering verification of accredited investor status.  In that regard, the SEC recently amended its Securities Act Rules Compliance and Disclosure Interpretations to clarify the calculation of income and net worth in determining accredited investor status and the applicability of the safe harbors relating to income and net worth.  In addition, the Securities Industry and Financial Markets Association recently offered guidance to registered broker-dealers and investment advisers on the determination of accredited investor status.  See also “SEC Provides Guidance on When the Bad Actor Rule Disqualifies Hedge Fund Managers from Generally Soliciting or Advertising,” Hedge Fund Law Report, Vol. 7, No. 9 (Mar. 7, 2014).