The Securities and Exchange Commission lifts ban on public advertisements of Hedge funds and other firms that seek private investments
Through a 4-1 vote, the rule eliminates an 80-year regime of advertising restrictions intended to safeguard small investors from taking on potentially dangerous risk. The rule covers the way issuers raise funds through private offerings, a process that is exempt from requirements to report public financial statements.
While the rule would authorize firms to raise unlimited amounts via mass advertising of private offerings, it would require reasonable steps to ensure that buyers are so-called accredited investors — who are wealthier and deemed better able to gauge investment risks.
The rule would also make it easier for start-up businesses to raise funding without immediately requiring compliance with SEC disclosure rules. The measure is the first adopted by the SEC under a mandate in the 2012 Jumpstart Our Business Startups Act approved by Congress and signed by President Obama.
The SEC adopted the rule while unanimously approving a separate rule to ban most felons and other "bad actors" from involvement in private offerings.
More story here: http://www.usatoday.com/story/money/business/2013/07/10/hedge-fund-ads/2505463/
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