1. A buyer of a security or other property who seeks to profit from it without exhausting the principal.
2. Broadly, a person who spends money with an expectation of earning a profit.
accredited investor. An investor treated under the Securities Act of 1933 as being knowledgeable and sophisticated about financial matters, esp. because of the investor’s large net worth. • In a securities offering that is exempt from registration, an accredited investor (either a person or an entity) is not entitled to protection under the Act’s disclosure provisions, although the investor does keep its remedies for fraud. [Cases: Securities Regulation 18.11. C.J.S. Securities Regulation § 64.]
institutional investor. One who trades large volumes of securities, usu. by investing other people’s money into large managed funds. • Institutional investors are often pension funds, investment companies, trust managers, or insurance companies. See MUTUAL FUND.
qualified investor. Securities. An investor who is an individual and has an investment portfolio worth at least $5 million, or a company that owns or manages investments worth at least $25 million.
sophisticated investor. Securities. An investor who has sufficient knowledge and experience of financial matters to be capable of evaluating a security’s qualities. • Sophisticated investors do not require the full protection of securities laws.
