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2 Oct 2006

SEC worried about Hedge Funds

In an article by Marketwatch it was reported that Securities and Exchange Commission enforcement director Linda Thomsen, told a Senate panel that insider trading by hedge funds is “an area of significant concern” to the SEC and to lawmakers.

In the prepared testimony to the Senate Judiciary Committee, Thomsen told the panel the SEC has brought five insider-trading cases this fiscal year involving hedge funds, out of 44 total insider trading cases.

The SEC is developing new ways to monitor hedge funds following a court’s voiding of its authority to register hedge fund advisers.

The enforcement director recently said the agency is going to focus on how hedge funds and broker-dealers interact, and that broker-dealers should report insider trading by the funds.

Federal securities regulators are planning to meet with organizations like the NASD and the New York Stock Exchange to discuss ways to possibly beef up their joint fight against insider-trading, the Securities and Exchange Commission official said.

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