“Since the effective date of the Dodd-Frank Act, approximately 1,800 advisers to hedge funds and private equity funds have registered with the SEC for the first time.” White said at a hearing yesterday at a meeting with the U.S. House of Representatives. “Some of the common deficiencies from the examinations of these advisers that the staff has identified included: misallocating fees and expenses; charging improper fees to portfolio companies or the funds they manage; disclosing fee monitoring inadequately; and using bogus service providers to charge false fees in order to kick back part of the fee to the adviser.”
In response to Michael Lewis’s book “Flash Boys: A Wall Street Revolt,” in which high-speed trading is postulated to leave some investors at an unfair disadvantage, White said: “The markets are not rigged, the U.S. markets are the strongest and most reliable in the world.”
CNBC reports: “Since the book was released, the FBI, the U.S. Attorney General, New York state prosecutors and the SEC have confirmed they are investigating the practices of high-speed firms.”
“Is not unlawful insider-trading.” Mary Jo White concluded.
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