The Securities and Exchange Commission staff recently issued a series of additional Compliance and Disclosure Interpretations with respect to what might constitute a “general solicitation” under Regulation D. These interpretations illustrate the logical contortions that must be endured when trying to regulate speech. After admitting that an issuer may disseminate factual information about itself, the staff undertakes to provide guidance on what constitutes “factual information”:
Question 256.25: What is factual business information?
Answer: What constitutes factual business information depends on the facts and circumstances. Factual business information typically is limited to information about the issuer, its business, financial condition, products, services, or advertisement of such products or services, provided the information is not presented in such a manner as to constitute an offer of the issuer’s securities. Factual business information generally does not include predictions, projections, forecasts or opinions with respect to valuation of a security, nor for a continuously offered fund would it include information about past performance of the fund. (Release No. 33-5180). [August 6, 2015]
Of course, it is nonsense to claim that past performance is not factual. A “fact” is after all something that has been done. The word itself is derived from the neuter past particle of the Latin word facere, meaning to do. My suspicion is that the staff regards past performance as “non-factual” because it perceives that the primary purpose of the dissemination of such information is to arouse new investor interest.