Advertising agencies may want to start calling their local billionaire hedge fund bosses – starting now!
The decades-long ban on hedge fund advertising has been lifted effective Monday – thanks to the 2012 Jumpstart Our Business Startups Act, which also allowed Twitter to register confidentially this month for a public stock offering.
While the new rules won’t likely lead to traders’ faces plastered on New York City buses or on grocery store shopping carts, it could result in more hedge fund “branding” in sports arenas or other public places deep-pockets people like to congregate, experts forecast.
An opera season or art gallery showing by your local friendly hedge fund is not out of the question.
It is also expected to lead to more subtle changes, such as fund managers talking openly about their performance to reporters and on television.
Hedge funds will also start making their web sites, which are currently password-locked, more accessible, experts added, and currently jittery traders will be more free to join the social-media conversation via Twitter and LinkedIn.
Meanwhile, on Sept. 23 hedge funds, private equity firms and other firms that raise large amounts of money in the private market will also start having to keep a closer eye on with whom they deal.
The so-called “bad actors” rule, enacted by the Dodd-Frank financial reform of 2010, seeks to punish funds for dealing with people who get into trouble for securities fraud or other violations.
A fund that does business with, say, a broker who is banned from the industry may also be disqualified from being able to raise money, experts said.