- Hedge funds and others raising investment capital can advertise their offerings to the general public. Specifically, the rule affects offerings that are private and are not required to report financial statements publicly.
- The ruling does not change who may purchase these securities. Only "accredited investors" may purchase. Anyone can see the marketing, but issuers and hedge funds are required to make reasonable efforts to ensure only accredited investors are afforded the opportunity to participate.
He's probably right. It's rational to assume more advertising will equate to greater fraud, but it's equally rational to believe the positive aspects of less regulation will outweigh the negatives. The timing of the rule change is ironic though. In 60 days, the new rules become effective, and the timing may prove embarrassing for the SEC. About the same time as we begin to see solicitations for investments, a movie about security fraudster Jordan Belfort The Wolf of Wall Street hits the silver screens. After the movie Boiler Room (reportedly inspired by Jordan Belfort's exploits) was released, I received more "hot stock tip" phone calls (or maybe I noticed it more), and I expect the same by the time The Wolf makes it onto DVD. Investors should expect to see investment marketing just in time for the holidays. I can see it now, "A diamond is forever, and now you can buy the mine." At the time of publication, the author had no positions in stocks mentioned. Follow @RobertWeinstein This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.