Posted by: jhamon | June 18, 2009

Hedge Funds “Get Off Easy”?

From Hedge Funds Get Off Easy In Regulatory Overhaul, For Now in FINalternatives.

June 18, 2009

President Barack Obama’s long-awaited financial regulation reform seems to have let hedge funds off relatively easy, for the time being.

While other jurisdictions, notably the European Union, consider substantially stricter measures to limit hedge funds’ activities, the Obama plan doesn’t have any specific restrictions at all. But there are signs that the U.S. administration may eventually impose more demanding regulations on the industry should it deem such measures necessary.

The centerpiece of Obama’s regulatory overhaul for hedge funds is the return of the hedge fund registration requirement, which was tossed by a federal court three years ago. Both houses of Congress are already considering the measure, which would require hedge fund advisers to register with the Securities and Exchange Commission

Barack Obama and Timothy Geithner

Two things:

  1. I personally don’t know anybody in the business who is NOT already registered with the SEC.  There are a few exemptions, but they are quite strict and very clearly targeted at highly sophisticated investors.
  2. I am so sick of the meme that hedge funds are unregulated.  It doesn’t look like that from my side of the table.  The real problem is that no amount of regulation will keep thieves (Madoff) from stealing or greedy clients (Madoff’s pigeons) ignoring the stench everyone else seems to smell.  For example, I have a friend who filed a complaint against Madoff in 1998!

OK, I’ll sit down now.

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