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Advertising and Marketing Concerns
Advertising in any form can be highly problematic for an investment adviser, even if such adviser is not required to be registered. The mere mention of an investment fund to a potential investor could be seen as an advertisement and may create liabilities that an investment adviser is unprepared to face.
The United States Securities and Exchange Commission (SEC) defines “advertisement” as “any communication, disseminated by any means, by or on behalf of an investment adviser, that offers or promotes the investment adviser’s investment advisory services.”
The SEC's position on advertising is organized as follows, as a means reasonably designed to prohibit fraudulent, deceptive or manipulative acts:
general prohibitions of certain advertising practices applicable to all advertisements;
tailored restrictions or conditions on certain practices (testimonials, endorsements, and third-party ratings) applicable to all advertisements;
tailored requirements for the presentation of performance results, based on the advertisement’s intended audience; and
a compliance requirement that most advertisements be reviewed and approved in writing by a designated employee before dissemination.
Any communication that an investment adviser plans to use to gain the attention of potential investors should be reviewed by competent legal counsel.
Our Experienced Attorneys can Provide Assistance with Exempt Securities Offerings
Drawing upon our detailed industry knowledge, CBIG Law guides companies and fund managers through the process of forming an exempt offering while ensuring compliance with federal and state securities laws that will allow you to raise capital from investors. During the pre-launch phase, we will counsel you on steps you can take that will give you the greatest advantage for the long-term management of your investment advisory firm or private company.
For more information on how we can assist you with your specific legal matters or questions, reach out to us here.
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