Tag Archives: US Securities and Exchange Commission

WHO’S AFRAID OF HEDGE-FUND ADVERTISING?

WHO’S AFRAID OF HEDGE-FUND ADVERTISING?

In April, 2012, President Barack Obama signed into law the Jumpstart Our Business Startups (JOBS) Act, which makes it far easier for companies to market their securities to investors. Next month, rules mandated by the JOBS Act and adopted in July by the Securities and Exchange Commission will go into effect that loosen the decades-old prohibitions on general solicitation efforts such as cold calling, mass mailing, and running certain commercials. The rules won’t only apply to, say, start-up tech companies. They’ll also apply to hedge funds, private-equity funds, and other alternative investment funds.

Will we soon see full-page advertisements for hedge funds in the TimesGQ, or Sports Illustrated? Maybe there will be smiling children and a line like “Invest in Cerberus: Your Future and Your Family.” Will they run commercials during the Super Bowl or the Sunday-morning talk shows? What about mass mailings to everyone in the tri-state area who bought a Mercedes-Benz or a Rolex last year? It’s all possible now.

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Hedge Funds And Private Equity Funds To Become More Accessible

Hedge Funds And Private Equity Funds To Become More Accessible

According to broadly accepted figures, small businesses generate about 70 percent of all new jobs created.  If we want to solve our persistently high unemployment rate, it would serve us well to do what we can to help small businesses create those new jobs.  But, the credit crisis of 2008/2009 has left a lasting chill in the capital markets . . . at least for small businesses.  Whether it is tighter credit policies of lenders or lenders simply not wanting to take certain risks, small businesses have found it difficult to obtain credit.  And, unless your small company’s business plan forecasts a market share of at least $1 billion, chances are that you are not going to get the attention of the venture capital players.  So, what’s a business owner to do?  My own firm is in the process of forming an oil and natural gas venture and we have contemplated allowing investors other than our existing clients into it.  When we get to that point, how might we do this?

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SEC Votes to Ease 80-Year-Old Ban on Private-Investment Ads

SEC Votes to Ease 80-Year-Old Ban on Private-Investment Ads

Hedge funds and other companies seeking private investments will be allowed to advertise publicly for funding under a rule approved today by the U.S. Securities and Exchange Commission.

The rule, which passed by a 4-1 vote, is the first one mandated by last year’s Jumpstart Our Business Startups Act to be completed by the SEC. A deadline for the regulation set by Congress lapsed more than a year ago.

The rule will ease 80-year-old advertising restrictions intended to help ensure small investors aren’t lured into taking inappropriate risks. Under the measure, startups and other small companies would also be able to use advertising to raise unlimited amounts of money.

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