Yesterday the Securities and Exchange Commission voted 4-1 to lift restrictions on how hedge funds, venture capital firms, and other privately held companies can promote themselves to potential investors.
While these firms will soon be able to broadcast their offerings, they can’t take money from just anybody: Investors must be accredited, which means the SEC considers them wealthy enough to risk their money. Critics say the change still opens the door to fraud. “Without common-sense protections, general solicitation will prove be a great boon to the fraudster,” Luis Aguilar, the lone SEC commissioner to vote against ending the 80-year-old ban, said in prepared remarks. The vote also gave fodder to quipsters on Twitter yesterday who tried out potential hedge fund advertising slogans, many of which made light of the industry’s disappointing returns.