10 Jul 2013 SEC Lifts Ban on Advertising for Private Investments
On Wednesday July 10, 2013, the SEC lifted its 80-year ban on advertising by private issuers of securities. The rule was the culmination of a process began by the JOBS Act passed last year. The move is designed to provide startups access to capital in a tight market dominated by institutional investors. Although the rule still limits investors to those designated “accredited”, it is an important step towards modernizing private security regulations. An “accredited” investor must meet certain qualifications such as a liquid net worth of $1 million or more. Critics of the ruling point to a lack of stringent guidelines to verify whether an investor is “accredited” or not and general concerns regarding the integrity of the private equity market. This is an important ruling for crowd sourcing as it democratizes the private equity market to some degree.Disclaimer: This blog and website are public sources of general information concerning our firm and its lawyers, as well as the information presented. They are intended, but not promised or guaranteed, to be correct, complete, and up-to-date as of the date posted. This blog and website are not intended to be, and are not, sources of legal opinion or advice. The materials, information, and communications on this blog and website do not apply to any particular person, entity, or situation, and do not apply to you or to your specific situation. You will need to consult with an attorney and/or other appropriate professional about your specific situation. Thank you.