Professor Mercer Bullard has submitted a comment letter, joined by the Consumer Federation of America, on the SEC’s proposal to eliminate a ban on general solicitations and advertising by issuers that are conducting a private offering. The letter highlighted recent research that showed that half of hedge fund managers, who are expected to take advantage of the new rule when it becomes final, had revised previously disseminated investment performance data, apparently to mislead investors. Unlike hedge funds, publicly offered mutual funds are required to calculate their performance according to a standardized formula. Bullard contended that the study demonstrated that a similar standard should be applied to all funds that offer their shares publicly.
The letter may be viewed here.