Reuters – Many people are worried about the fact that the SEC has finally got around to ending the ban on “general solicitation” by hedge funds. The Reuters story alone features a host of unhappy characters: Heath Abshure, the president of the North American Securities Administrators Association; Democratic SEC commissioner Luis Aguilar; Senator Carl Levin; Barbara Roper, the investor protection director at the Consumer Federation of America. All of them have pretty much the same view: the job of the SEC is to protect consumers from being fleeced by cunning hedge funds, and now those cunning hedge funds will have more ability than ever to fleece the unsuspecting public.
But it seems to me that this is one of the least objectionable parts of the JOBS Act, and in fact is likely to help individual investors much more than it hurts them. There is a downside, of course: if you have a million dollars to spare and are the kind of person who’s easily persuaded by fast-talking snake-oil salesmen on the telly, then you might wind up writing an ill-advised big check. But then again, if you have a million dollars to spare and are the kind of person who’s easily persuaded by fast-talking snake-oil salesmen, then you’re probably on the speed-dial list of all manner of such people already — selling not only hedge funds but even more hazardous instruments like penny stocks.