The Commission should follow the same path here: begin with a prohibition, gain experience, and ultimately consider development of a detailed rule that would promote comparability of performance figures through the imposition of standardized methodologies. Private funds may argue that the general anti-fraud provisions in Section 206(4) and Rule 206(4)-8 are sufficient to protect the “sophisticated” accredited investors that are targeted by the advertisements. We feel strongly, however, that it is not enough to say that only accredited investors will be affected by the advertisements, because these advertisements will come before sophisticated and non-sophisticated, accredited and non- accredited.
