Farewell, poor Connecticut, we barely knew ye. Next stop: Vegas, baby.
Prompted by the Bernard Madoff investment scandal and other financial failures, Democratic senators called Tuesday for Connecticut to become the first state in the nation to require more disclosure and transparency for hedge funds, private-equity firms, and venture capitalists.Led by Senator Bob Duff of Norwalk, senators said the move was necessary in order to protect consumers and investors. The bill, which is supported by the Managed Fund Association, states that any firm that is not registered with the Securities and Exchange Commission must still abide by the SEC rules that state that material conflicts of interest must be disclosed to the investors.
"We're not changing the rules. These are the rules the SEC has,'' said Duff, who has been pushing for legislation for three years.
We are looking forward to seeing all the hedge funds move to Nevada. Actually, when you think about it, the convenience factor alone is reason enough to make the move. A lack of proximity to Washington is also a major point for the trip West. Then there are the amazing deals on hotels that the credit crunch has created. And do I even have to mention the ease of parking?
Senate Debates First State Hedge Fund Regulation in USA [courant.com]
Posted by guest , May 26, 2009 5:23PM
Slogan Time:
Connecticut: The New Jersey
Posted by wcburrs87 , May 26, 2009 5:38PM
Nevada won't work. How are you supposed to spray thousands of dollars onto your female employees if you don't have a plane ride home?
Posted by american bandersnatch , May 26, 2009 5:42PM
One of the best ideas to come from the heir to the Duff Beer fortune.
Posted by guest , May 26, 2009 5:43PM
$hit. Is this going to prompt A$ne$$ to open his filthy pie hole? It's not like we haven't had enough of that douche bag.
Posted by Anal_yst , May 26, 2009 5:45PM
Ok so survey, where do all the funds go now?
Also for the law types out there, for funds domiciled offshore and/or in other jurisdictions, does this mean squat? Just because the office is in the US (specifically Connecticut), shouldn't affect reporting requirements, right?
Posted by guest , May 26, 2009 5:54PM
Where are the hedge fund operators going to go? They need to one up people like themselves so have to flock together in Greenwich. They aren't going any place....they'll just cheat. (Wink and a nod!). Blumenthal couldn't find his ass with both hands and a flashlight so no worries about enforcement!
Posted by Investorcluzo , May 26, 2009 6:36PM
@anal_yst: go east young man...they'll take refuge in those rhode island mansions that folks from beantown like to use for proms/weddings...
Posted by guest , May 26, 2009 8:06PM
anal_yst,
As long as you do business in CT, the state has the right to regulate you. So, even if they're domiciled offshore, they'll have to move out of CT to avoid this extra stupid and costly compliance headache.
Until today, I thought Greenwich Real Estate had another 50% to go, but now I'm thinking 55% at least.
Posted by guest , May 26, 2009 8:07PM
Leaving to avoid SEC rules, is illegal evasion and automatically triggers investigation.
Posted by Lowly Assistant , May 26, 2009 8:23PM
9,
How about the ultra-PR move: from Greenwich to Grosse Pointe, MI (just outside Detroit). 1) CT government would catch hell from trying to stop a huge generator of tax to "help" a flailing state; 2) MI (at least for the first 5 years, before the blues attack and get greedy) would probably leave the funds generally free to do as they wish (money talks); 3) the mansions all the car execs are leaving are waiting for someone who enjoys shitting in a different bathroom each day of the month (Greenwich, Detroit will see your 23 and raise you 7).
It'll never happen...but would make for a fun, political showdown.
Although, then the Big Guy is stuck eating saganaki in Greek Town (I hear he's lactose intolerant).
Posted by guest , May 26, 2009 8:30PM
@9
Dipshit, the least you can do is read more carefully. These firms don't have to register with the SEC. That's the point. If they had to register with the SEC and comply with these SEC rules, CT wouldn't have to pass a law to force them to comply with these particular SEC rules. CT is trying to make them comply regulations the SEC itself doesn't impose on them, you dig?
Posted by Joseph di Jersey City , May 26, 2009 8:33PM
Also, no personal or corporate income tax in Nevada.
Posted by guest , May 26, 2009 8:55PM
5- No, not really. States are limited in telling people what they can do unless the state is directly impacted in some way. This is especially so with regard to foreigners. So, if we are talking about an offshore fund, they can tell CT to fuck off. It is possible that CT can restrict marketing the fund to CT investors (I don't know if the law would do that) but since investors in these funds aren't small fries, the investor should be able to structure around it by having their interest held by an out of state trustee or something.
I wouldn't get excited about this. CT comes up with all sorts of idiotic ideas and never follows through on them because they realize at the last second that they would be cutting their own throat. Believe me, I have seen worse than this out of CT.
Posted by guest , May 26, 2009 9:02PM
how about we have that assclown from Norwalk peek closer into the books of that giant commodities trading firm down the road. me thinks they won't like what they find.
Posted by guest , May 26, 2009 9:07PM
@14- that giant commodities trading firm being...?
Posted by guest , May 26, 2009 9:30PM
I hope everyone in CT is simultaneously eaten by their pet chimps.
Scarsdale Surprise
Posted by guest , May 26, 2009 11:12PM
Funds in Vegas? Not a bad idea. Roulette is the purest form of stat arb (5.26% min yield fof the hourse) plus there's the pre-existing entertainment complex to help defray the costs of marketing to new clients.
This could also play into asset retention; imagine the lock-up incentive a client would have to prevent the fund from publishing on the web that episode involving at least 10 lines of gak off a hooker's ass, the full bottle of Jack Daniels consumed through a straw as it was poured down the snatch crack of a 6'5" 38-24-34 ex Nevada league roller derby pro, and the dual administration of a Cleveland steamer to former Olympic figure skater Tania Harding with a golden shower washdown provided by a lesbian dwarf.
Posted by trojan , May 26, 2009 11:56PM
i'll take Mohegan Sun over the Rio any day
Posted by guest , May 27, 2009 11:07AM
@17......I think you and I shared a cab between the MGM and the Bellagio.