WASHINGTON (Reuters) - The Securities and Exchange Commission on Wednesday voted to lift a longtime advertising ban for hedge funds and other firms offering private placements, a controversial change that has sparked fierce debate between business interests and consumer advocates.
The SEC voted 4-1 to lift the ban, with Democratic Commissioner Luis Aguilar sharply dissenting amid concerns that the rule could open the floodgates to fraud by letting companies use the Internet and television to prey on innocent investors.
Separately, the SEC voted to adopt a rule barring felons and other law-breakers from pitching some private placement deals.
In addition, the SEC voted 3-2 to issue a third proposal requiring companies using general solicitation to file additional information with regulators, though both Republican commissioners said they have grave concerns that it would unduly burden the private markets.
Reporting by Sarah N. Lynch; Editing by Gerald E. McCormick