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 (\u00c3\u201a\u00c2\u00a3660 billion) industry.<\/p>\n
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.<\/p>\n
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.<\/p>\n
Mr Blumenthal said that the lack of regulation was dangerous for private investors and for the market. \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cRight now, hedge funds are in a regulatory void,\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d he said, adding that federal government \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cinertia\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d on hedge funds \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cwill invite state action\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d.<\/p>\n
Connecticut is home to 8,000 of the world\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s biggest hedge funds and therefore has a key interest in regulating the industry.<\/p>\n