Hedge Funds Will Be Able To Advertise Starting This Week
On Monday, September 23rd, the Jump-Start Our Business Start-Ups Act (aka the "JOBS Act") will officially go into effect.
One of the changes that will come as a result of the JOBS Act going into effect is that hedge funds and private equity funds will be able to advertise in an attempt to more easily reach accredited investors.
Prior to Monday, companies that approached accredited investors were required to have a "substantial" relationship with the investor already in place.
As of Monday, hedge funds such as SAC Capital and Bridgewater Associates will be able to advertise on TV, radio or any other medium. So, if you sit down to the final episode of "Breaking Bad" next Sunday, you may just see an advertisement for SAC Capital on your TV screen.
Hedge funds will also be able to run full-page advertisements in the New York Times, purchase ads on Google Adwords or sponsor professional sports teams. The list goes on and on.
The rule that hasn't changed, however, is that hedge funds and private equity funds will still only be able to obtain money from "accredited investors".
In order to be considered an accredited investor, you must earn more than $200,000 per year or have more than $1,000,000 in net worth, excluding your primary residence.
The SEC has already warned that they will be closely scrutinizing the advertising that the hedge fund industry does to ensure that no shenanigans take place.
Filed under: General Market News