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Securities And Exchange Commission Announces Plans To Keep Close Tabs On Any Moderately Successful Hedge Funds

Are you a hedge fund that’s made it a habit of doing right by your clients? Just barely justifying your fees? Doing your job? SEC director of enforcement Robert Khuzami is on to you. He knows the only way anyone could beat the market by 3 percent (or what he calls “aberrational performance”) is by being a genetic freak or criminal. So everybody just sit there with your hands in the air. You’re all suspect.

Recently, during congressional testimony, Robert Khuzami, the Director of the Division of Enforcement for the U.S. Securities and Exchange Commission (SEC), faced tough questions regarding the SEC’s response to the Madoff scandal. In response, Khuzami revealed an investigative initiative concerning hedge funds. Enforcement is now focusing on hedge funds that outperform “market indexes by 3% and [are] doing it on a steady basis.” Khuzami referred to such performance as “aberrational,” and stated that Enforcement is “canvassing all hedge funds” for such “aberrational performance.”

SEC Enforcement Division To Focus On Hedge Funds That Outperform The Market [MWE via Heidi Moore]

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100 Responses to “Securities And Exchange Commission Announces Plans To Keep Close Tabs On Any Moderately Successful Hedge Funds”

  1. AmericanBandersnatch says:

    Note to Khuzami: Selection Bias

  2. Anonymous says:

    Have you been dropped on your head as a child? Do you have weight issues? Does that seventh nose ring make you feel youthful anger every time in pokes your septum? Well come on down and paRRRty – we’ll have DJ Freakazoid spinning in the parking lot!

  3. Thlayli says:

    One can never underestimate stupidity. Especially those working for the government.

  4. Guest says:

    That’s why it’s important to keep the returns low and steady at 1.25% a month. I never got caught that way.

    Love,
    Bernie

  5. Chuddy says:

    Whew – we dodged a bullet there……….

    ~ Phil and his Pigs

  6. guest says:

    I’m tired of financial service sector workers complaining. Just like every other industry in America, you’re either going to be regulated on the front end or face enforcement on the back end. Stop bitching about being subject to the law the same as everyone else.

  7. John Mack says:

    He’s talking to you, Fleece Head!!!!

  8. Richard Cripples says:

    Khuzami went on to say “in order to make this type of manipulation more difficult, I, along with many of my colleagues, will be submitting our resumes to all suspect firms on a weekly basis. It is my belief that the sheer volume of resumes will overwhelm the administrative staff and not give them adequate time to create phony financial statements. In order for us to closely monitor the progress of this project I request that all true Americans (not employed by the SEC) immediately cease in submitting their resumes to any hedge funds for the foreseeable future. It won’t be easy, we will most likely have to interview at these firms as well in order to keep them as distracted as possible, but it is a sacrifice we are willing to make. Thank you, and God bless the USA.”

  9. Lewis Winthorpe III says:

    Outperforming the market by 3% is the new getting killed by it.

  10. Lewis Winthorpe III says:

    Outperforming the market by 3% is the new getting killed by it.

  11. revolution capital says:

    I have no concerns

  12. revolution capital says:

    I have no concerns

  13. Seaman Bodine says:

    This is actually true, of AUM is > 10bn. That’s what SAC is headed for the Hershey Highway.

  14. Seaman Bodine says:

    This is actually true, of AUM is > 10bn. That’s what SAC is headed for the Hershey Highway.

  15. 5th grader says:

    Have you ever heard of alpha, skewness, kurtosis, fat tails, assymetric payoffs or leverage you closet indexing government douche?

  16. Chuddy says:

    I have heard people refer to me as fat tailed

    – Maria

  17. Fund Manager says:

    Note to self, change hurdle rate and make performance fees variable.

  18. FrankBarney says:

    I think this will go down as one of those brilliant government quotes, such as “Fannie and Freddie are adequately capitalized”

  19. AspiringSEClawyer says:

    Gundlach has been outperforming, where can I get a job monitoring his internet traffic?

  20. BigTrannySurprise says:

    In response, Khuzami revealed an investigative initiative concerning SEC employees. Enforcement is now focusing on employees that outperform “normal on-the-job porn consumption by 3% and [are] doing it on a steady basis.” Khuzami referred to such viewing habits as “aberrational,” and stated that Enforcement is “canvassing all employees” for such “aberrational viewing habits.”

  21. BigTrannySurprise says:

    In response, Khuzami revealed an investigative initiative concerning SEC employees. Enforcement is now focusing on employees that outperform “normal on-the-job porn consumption by 3% and [are] doing it on a steady basis.” Khuzami referred to such viewing habits as “aberrational,” and stated that Enforcement is “canvassing all employees” for such “aberrational viewing habits.”

  22. BigTrannySurprise says:

    In response, Khuzami revealed an investigative initiative concerning SEC employees. Enforcement is now focusing on employees that outperform “normal on-the-job porn consumption by 3% and [are] doing it on a steady basis.” Khuzami referred to such viewing habits as “aberrational,” and stated that Enforcement is “canvassing all employees” for such “aberrational viewing habits.”

  23. Jason says:

    Annoucing a new fee schedule.
    Mgmt Fee= 0%
    Incentive Fee= 100%
    Hurdle Rate = Bmark + 2.99%

  24. Guest says:

    Our models have the necessary sophistication to offset the risk of “aberrational performance”

    -D.E. Shaw Analyst

  25. Spanishmoon says:

    “SEC tranny porn experts have informed us that Repo 105 is still legal” – Dick Fuld

  26. n.marcus says:

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  27. n.marcus says:

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  28. n.marcus says:

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  29. n.marcus says:

    I have the say the comments above are the best I’ve seen on DB in quite some time. Even if they are the product of not-so-subtle ATL trolling, it is welcome.

  30. n.marcus says:

    I have the say the comments above are the best I’ve seen on DB in quite some time. Even if they are the product of not-so-subtle ATL trolling, it is welcome.

  31. n.marcus says:

    I have the say the comments above are the best I’ve seen on DB in quite some time. Even if they are the product of not-so-subtle ATL trolling, it is welcome.

  32. Guest says:

    People who work at the SEC most hate their life.

  33. Guest says:

    People who work at the SEC most hate their life.

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    How’s rentec doing these days?

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    How’s rentec doing these days?

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    Regarding last quarter’s results, I have some bad news, and some good news. The bad news is that we did not beat the market. The good news is …

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