Times Online – CALLS to impose stiff rules on hedge funds intensified last night as Richard Blumenthal, the Connecticut attorney-general, told politicians that states were poised to join together todraw up their own regulations to govern the $1.2 trillion (£660 billion) industry.
Mr Blumenthal revealed his plans to regulate hedge funds in a speech before the Senate Judiciary Committee, which met yesterday to discuss the growing instances of hedge funds accused of wrongdoing in the marketplace.
The US Securities and Exchange Commission (SEC) recently passed the first set of rules to govern hedge funds through a loose registration system, but the proposal was thrown out by a federalappeals court last week, leaving the powerful private investment funds free to go about their business unchecked by a regulator.
Mr Blumenthal said that the lack of regulation was dangerous for private investors and for the market. “Right now, hedge funds are in a regulatory void,†he said, adding that federal government “inertia†on hedge funds “will invite state actionâ€Â.
Connecticut is home to 8,000 of the world’s biggest hedge funds and therefore has a key interest in regulating the industry.
