Compliancex

It used to be that a typical hedge fund employee would linger in front of his computer screen, cup of Starbucks in his left hand, with his right finger hovering tenuously over the left-click key on his mouse, with the cursor pointed to “Send.” Here’s why:

…some consumer advocates contend the current rules [governing hedge fund publicity] are draconian, preventing fund managers from putting basic information on their websites and even chatting with reporters about strategies or performance for fear the comments get interpreted as solicitation.

“People are spending a tremendous amount of time worrying, ‘Can I email this document to this person?’” says Judith Gross, a hedge-fund-compliance consultant. [WSJ]

How did they ever get any work done?

All that’s about to change. Luckily for hedge funds (though perhaps not for investors)*, no hedge fund need further be afflicted by this rampant and paralyzing e-mail insecurity. Let the potentially solicitous e-mails fly with reckless abandon!

In a small provision of the JOBS Act, previously reported on the Compliance Exchange, the marketing restrictions in place on how hedge funds and private equity firms may market their services are lifted. This means that fund managers may speak publicly and with the media about their firms as well as advertise to the general public.

*Consumer advocates fear that though the qualifications for fund investors will remain unchanged, the general public will be lured unawares into tempting investments that they are just not qualified to understand. Is taking money from American investors just like taking candy from a baby?