SEC Lifts Advertising Ban

Accredited investors need to be on high alert now that theSEC recently issued a final rule lifting an 80-year-old ban prohibiting privatecompanies from advertising their unregistered securities.  Before these private companies could only usenetworking and word of mouth to reach accredited investors, but now they cansolicit the wealthy using traditional media, social media, or even coldcalling.

Investors are accredited if they earned at least $200,000 ineach of the past two years or if they have at least $1 million in net worth.  This makes up about 7.4 percent of U.S. households.

See KathleenPender, Private Firms, Funds Can NowTarget Wealthy Investors With Ads, Cold Calls, San Francisco Chronicle,July 14, 2013.