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On Wall Street – A Connecticut bill that would have imposed transparency and licensing requirements on hedge funds failed to be signed into law Wednesday when the state house of representatives ran out of time to vote on the measure.
The legislature’s special sessions will now focus on the state budget and, therefore, will not be able to address the proposed legislation.
“We’ll have to bring it up again next year,” Ryan Barry, co-chairman of the state house’s joint banks committee and the main supporter of the bill, told Dow Jones.
Stamford Advocate – Although it had bipartisan support, a bill requiring hedge funds operating in Connecticut to disclose conflicts of interest to investors died in the House of Representatives Wednesday, the final day of the 2009 legislative session.
"It ‘blew up’ like Amaranth, like Bayou," said state Rep. Ryan Barry, D-Manchester, who co-sponsored the proposal with Sen. Bob Duff, D-Norwalk, co-sponsored the legislation.
Barry was referring to the high-profile collapses of the Stamford-based Bayou Group LLC in 2005 and Greenwich-based Amaranth Advisors LLC in 2006, which inspired him and Duff, as Banks Committee chairmen, to pursue hedge fund regulations.
Miami Herald – The Obama administration’s bid for $50 million to move prisoners from the Guantánamo Bay detention facility was left out of the Democratic-authored emergency war spending bill unveiled Monday.
Defense Secretary Robert Gates had sought the funds in case the U.S. wanted to build or retrofit an alternative facility for the detainees in the United States. He called the funds ”a hedge” in case the government wanted to start construction.
However, when Democrats in the House of Representatives released their spending package Monday for funding the Iraq and Afghanistan wars and related expenses, the $50 million for Guantánamo was missing.
guardian.co.uk – The Independent’sJeremy Warner is not convinced and argues that the failure is entirely their own. In the Daily Telegraph, Richard Fletcher explains that though Horlick blames US regulators for their lack of oversight her clients should be asking her some tough questions. In The Times, Daniel Finkelstein says what you need to understand about Charles Ponzi’s scheme is that when he started it, it wasn’t a Ponzi scheme. It just got out of hand.
David Wighton says the sums involved are breathtaking. He suggests there must be a worry that other boom-time frauds will now be exposed by the bust. David Aaronovitch says by last week he was ready for Bernard Madoff. He had read JK Galbraith’s The Great Crash 1929 and taken his point that in boom times the rate of embezzlement grows because the promised rewards don’t seem as absurd as they actually are and the rate of discovery falls off. In the Daily Mail, Alex Brummer says that the £33bn fraud by Madoff could spell the end for the most controversial investment vehicles of recent years: hedge funds.
