The National Association of Independent Public Finance Advisors is concerned that a proposed change to the Securities and Exchange Commission's definition of "large accredited investors" may allow some unsophisticated local governments to invest in questionable deals through private placement that they do not fully understand.

In a two-page letter sent to the commission earlier this month, but not released until yesterday, NAIPFA warned that proposed changes to the SEC's Regulation D for offers and sales of securities would "facilitate fraudulent behavior against unsophisticated local governments."

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