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Focus on Private Securities: 80-Year-Old Ban Lifted

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The SEC recently voted to lift the 80-year-old ban on advertising for certain private securities offerings, such as private equity and hedge funds. As part of the SEC's JOBS Act, the SEC has relaxed rules on hedge fund and private equity funds ability to use general solicitation to advertise as part of their fundraising efforts.
July 15, 2013

The SEC recently voted to lift the 80-year-old ban on advertising for certain private securities offerings, such as private equity and hedge funds. As part of the SEC's JOBS Act, the SEC has relaxed rules on hedge fund and private equity funds ability to use general solicitation to advertise as part of their fundraising efforts.

The advertising restrictions were originally intended to help protect small investors from taking inappropriate risks. The relaxing of the rules will allow funds to more broadly communicate their various strategies to the market, provided that all purchasers of securities are accredited investors and the issuer takes reasonable steps to verify that such purchasers are accredited investors.

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Under U.S. Treasury Department guidelines, we hereby inform you that any tax advice contained in this communication is not intended or written to be used, and cannot be used by you for the purpose of avoiding penalties that may be imposed on you by the Internal Revenue Service, or for the purpose of promoting, marketing or recommending to another party any transaction or matter addressed within this tax advice. Further, RubinBrown LLP imposes no limitation on any recipient of this tax advice on the disclosure of the tax treatment or tax strategies or tax structuring described herein.

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