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24 Oct 2006

Senator Alarmed by lack of Hedge Fund Transparency

U.S. Senate Finance Committee Chairman Charles Grassley said in a letter to federal agency heads that he plans to look into risks posed by hedge funds to pension funds.

Grassley, a republican from Iowa, said in a letter to treasury secretary Henry Paulson and SEC chairman Christopher Cox “to report to him on any transparency requirements facing hedge funds…..Tens of millions of Americans are exposed to the risk of hedge funds through intermediaries such as pension funds, endowments and other investment pools,....The potential for significant losses at our nation’s pension funds due to hedge fund investments could put the retirement security of American workers in jeopardy.’‘

Grassley also sent letters to labor secretary Elaine Chao, commodity futures trading commission chairman Reuben Jeffery, pension benefit director Vincent Snowbarger and six US senators among others.

In an interview with Bloomberg, Grassley said “It’s quite obvious that some hedge funds have problems, maybe even some showing criminal activity,....We want to make sure there’s transparency. Sunshine in the best disinfectant and transparency is our goal at this point.”

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