TLS also a culprit
It’s probably a blatant violation of the Securities Act for one. They filed a 506b exemption for the hedge fund. That means zero general marketing. What do you call Ami, Mishpacha, huge billboards, and paid influencers?
“Section 4(a)(2)
To qualify for this exemption, which is sometimes referred to as the “private placement” exemption, the purchasers of the securities must:
either have enough knowledge and experience in finance and business matters to be “sophisticated investors” (able to evaluate the risks and merits of the investment), or be able to bear the investment’s economic risk
have access to the type of information normally provided in a prospectus for a registered securities offering and
agree not to resell or distribute the securities to the public
In general, public advertising of the offering, and general solicitation of investors, is incompatible with the private placement exemption.”
“Rule 506(b) of Regulation D is considered a “safe harbor” under Section 4(a)(2). It provides objective standards that a company can rely on to meet the requirements of the Section 4(a)(2) exemption. Companies conducting an offering under Rule 506(b) can raise an unlimited amount of money and can sell securities to an unlimited number of accredited investors. An offering under Rule 506(b), however, is subject to the following requirements:
no general solicitation or advertising to market the securities
securities may not be sold to more than 35 non-accredited investors (all non-accredited investors, either alone or with a purchaser representative, must meet the legal standard of having sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the prospective investment)
If non-accredited investors are participating in the offering, the company conducting the offering:
must give any non-accredited investors disclosure documents that generally contain the same type of information as provided in Regulation A offerings (the company is not required to provide specified disclosure documents to accredited investors, but, if it does provide information to accredited investors, it must also make this information available to the non-accredited investors as well)
must give any non-accredited investors financial statement information specified in Rule 506 ”
