SEC's New Rule: Implications For Fund Managers

Law360, New York (September 4, 2007, 12:00 AM EDT) -- On August 3, 2007, the Securities and Exchange Commission ("SEC") issued a release setting forth new rule 206(4)-8 under the Investment Advisers Act of 1940 (the "Act").

In general, Rule 206(4)-8 makes it a violation of the Act for the manager of a venture capital or other private equity fund (a "Fund") to make any misleading statement to a current or prospective investor in the Fund, without regard to whether the statement is related to an issuance of Fund securities.

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