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28 Apr 2010

AIMA Comments on AIFMD Statement - As part of the the debate over the European Union’s draft Alternative Investment Fund Managers Directive, French and German Finance Ministers, Christine Lagarde and Wolfgang Schäuble, made a statement about the standard for European hedge funds, - found in full in today’s Wall Street Journal, proposing a draft directive providing supervisors with full access to all relevant information regarding individual hedge funds.

AIMA, (The Global Hedge Fund Industry Association) said: “We very much welcome the comments by Mrs. Lagarde and Mr. Schäuble that ‘France and Germany believe in open financial markets’ and that ‘qualified investors should be free to invest in funds from all around the globe irrespective of quality standards set for state-of-the-art European hedge funds’. Given the widespread international concern over possible protectionist consequences of the Directive and the potential impact on European investors, this is a significant and reassuring statement.

“While the comments by Mrs. Lagarde and Mr. Schäuble are welcome, we would note that the current texts of the Directive do not necessarily reflect these sentiments, and we presume that the French and German governments would therefore support appropriate revisions in line with these remarks. In particular, while Mrs. Lagarde and Mr. Schäuble say that EU investors should be free to invest in non-EU funds as long as non-EU investment funds and their supervisors provide for adequate information exchange to mitigate systemic risk, the current text being discussed at Council level imposes additional requirements on non-EU funds beyond this.

“We do agree that it is important that the AIFM Directive addresses the issue of systemic risk; AIMA, as the global hedge fund industry association, has consistently supported transparency by the industry in this respect, namely the reporting of systemically relevant data in the interests of financial stability to national supervisors.

“We also remain concerned about the details of the practical application of this Directive and would urge policymakers to liaise closely not only with the industry but with the regulators with the most experience of the sectors covered by this Directive to ensure a consistent, proportionate and practical piece of final legislation.”

Assets Seized After Suicide Attempt – The Denver Post reports that authorities have seized the assets of local hedge fund manager Sean Mueller. The State is accusing him of running a Ponzi scheme involving approximately $122 million.

An investment statement released by investigators showed only $15 million in his account, after the hedge fund had claimed assets of $122 million.

Mueller Capital’s Over-Under Fund raised more than $20 million from three investors and that at least 30 more also may have made “substantial investments”, the Denver Post reported.

“I’m very sorry for the damage I have done.” Mueller said in a handwritten note, according to the Post.” I always thought I could make it back. Nobody else had any involvement except me.”

After threatening to kill himself, it is reported that Mueller was found by police last Thursday considering a jump from about 19 stories. Mueller had also apologized to his clients for financial losses by Email.

The hedge fund manager was taken to a hospital by the Greenwood Village police.