Sarasota Herald-Tribune – The U.S. Securities and Exchange Commission has hundreds of pages of complicated rules governing investment advisers. But the agency — under fire for failing to stop New York hedge fund manager Bernard Madoff and his alleged $50 billion Ponzi case — has yet to impose even the most basic registration requirements on thousands of managers.

Until 2006, no hedge fund managers had to register with the SEC because of a rule making those managers with 15 or fewer investors exempt from the registration requirement. The SEC interpreted that rule in an odd way: A fund can be an investor.

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