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Republican Commissioners Troy Paredes and Daniel Gallagher voted against the proposal requiring advance notice of a sale and new information. The public has 60 days to comment on it. After that, the agency can take it up for a final vote. The lifting of the advertising ban will weaken investor protections, said Sen. Carl Levin, D-Mich., who heads a Senate subcommittee that has investigated financial industry misconduct. The SEC rule "puts essentially no effective limitations on the types or forms of advertising that can be used to promote high-risk investments, exposing unsuspecting investors to potentially misleading claims they will be unable to evaluate," Levin said in a statement. An association representing state securities regulators also said it was disappointed that the SEC allowed advertising to proceed before installing investor safeguards. The head of SecondMarket, a private stock exchange on which shares of privately held companies are traded, called the SEC's action "an important step forward in bringing today's regulations into the 21st century." "After today, a much deeper, broader group of (qualified) investors will have the opportunity to hear about
-- and potentially invest in -- private companies and funds," said SecondMarket CEO Barry Silbert.
[Associated
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