Publication

“SEC Proposes New Rules to Protect Investors in Pooled Investment Vehicles”

On December 27, 2006, the Securities and Exchange Commission issued Release No. 33-8766; IA-2576, proposing two new rules aimed at protecting investors in pooled investment vehicles. The first rule would prohibit advisers to pooled investment vehicles from making false or misleading statements to, or otherwise defrauding, investors and potential investors in pooled investment vehicles. The second rule would increase the threshold requirements for becoming an accredited investor, under Section 4(6) and Regulation D of the Securities Act of 1933, as amended, for investors buying interests in “private investment vehicles,” including hedge funds and private equity funds exempt under the Investment Company Act of 1940 pursuant to Section 3(c)(1). This Stroock Special Bulletin summarizes the Release and these proposed rules.

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