Isn’t that one huge billboard for that hedge fund just so incredibly annoying? No, it isn’t, because until just about now, hedge funds and other firms that rely on private investments haven’t been able to advertise for investors publicly. That’s all about to change, as the Securities and Exchange Commission adopted a new rule yesterday that ditches an 80-year ban on ad restrictions.

The SEC voted 4-1 to lift the ban that was originally designed to protect the little folk out there from taking on more than they could handle. It’s no easy thing to invest in hedge funds and other private firms, as they don’t have to report public financial statements and aren’t held accountable in the same way as public companies, reports Bloomgberg.

It’s risky business, in other words.

The rules will allow firms to raise unlimited amounts of cash through advertising their private offerings, but will also require those firms to take certain steps to make sure that buyers are accredited investors. That means people who are wealthy enough to take on the investment risks, and know what they’re getting themselves into.

This could also out a ding in the operations of companies like Kickstarter, the darling of the start-up world, as it’ll make it easier for start-ups to gather up cash without first having to deal with the SEC’s disclosure rules.

Another rule was passed that will ban most kinds of felons and other shady characters, known as “bad actors” from participating in private offerings. In addition, a proposal that would make issuers tell the SEC 15 days before starting offerings and at the end of sales also got the go ahead, and will now be up for public comment.

“We want this new market, and the private markets in general, to thrive in a safe and efficient manner, and the rules we adopt and propose today are designed to facilitate that objective,” said SEC Chairman Mary Jo White.

There still seems to be a lot of room for firms to take advantage of unsuspecting people or those unaware of the potentially dangerous risks of investing, so it’ll be interesting to see what further action the SEC takes to protect those investors — if it takes any at all.

SEC Votes to Ease 80-Year-Old Ban on Private-Investment Ads [Bloomberg News]

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