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.

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Roger Royse
rroyse@rroyselaw.com

Roger Royse, the founder of the Royse Law Firm, works with companies ranging from newly formed tech startups to publicly traded multinationals in a variety of industries. Roger regularly advises on complex tax structuring, high stakes business negotiations and large international financial transactions. Practicing business and tax law since 1984, Roger’s background includes work with prominent San Francisco Bay area law firms, as well as Milbank, Tweed, Hadley and McCloy in New York City.
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