Washington Post – A senior Republican on the Senate Banking Committee said on Monday he wants hearings on how to protect investors in hedge funds now that the $1.3 trillion industry has freed itselffrom regulation by the Securities and Exchange Commission.

Sen. Chuck Hagel, chairman of a subcommittee on international trade and finance, said he would also work with members of the president’s financial working group to determine what oversight of hedge funds is needed. The Federal Reserve, the Treasury Department, the Commodity Futures Trading Commission and the SEC are members of the group.

Last Friday, a federal appeals court dealt a major blow to the SEC when it tossed out a rule requiring most U.S. hedge fund advisers to register with the agency.

The SEC rule, which went into effect in February, was a key first step in regulating an industry, which saw its assets double in the past five years as pension funds, endowments and charities poured in billions of dollars to boost their investment returns.

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