Skip to main content

Dealbreaker Weekend Edition: Blaming Hedge Funds

We are all for basic hedge fund registration for funds over a certain AUM, since the questions asked by an SEC examining team pale in comparison to the kind of scrutiny serious investors pummel funds and their managers with on a regular basis, but the SEC (in the form of Monarch of the Red Tape, Mary "Queen of Knots" Schapiro), likely smarting badly after the drubbing it caused itself in missing Madoff despite being led to the body, the murder weapon, the bloodstained suspect, the videotapes of the incident and presented with a notarized confession, is slowly being drained of authority. Realizing this suddenly, the Commission has woken up to the fact that there is a government turf war on, and the stakes are the highest they have been since the New Deal. A massive list of new powers and wide sweeping authorities are sitting on the felt and the SEC is finally in for a few hands- betting high and hard to make up for lost time:

Schapiro said "it's certainly possible" that the SEC would consider forcing hedge funds to publicly disclose short- sale positions, imposing restrictions on leverage and restricting what the firms can invest in.
"We're not at the point where we've made decisions about those things," she said, adding that the SEC would first consult with other government agencies.

We would point out to the SEC that hedge funds had little to do with the present crisis, and that, in fact, those firms dying on the vine are the same firms that endured the greatest level of regulation prior to imploding, but reason went out the window long ago when Obama slammed the bottle of Jack Daniels on the table after taking that first big hand and announcing: "I won."
SEC Chief Schapiro Wants Authority to Make Hedge-Fund Rules [Bloomberg]