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Law.com – As Marc S. Dreier was being arrested for attempting to defraud hedge funds of more than $100 million, some of the 10 affiliates of Dreier LLP were peeling off and others were trying to hold the firm together even as money for insurance and some operating expenses is frozen.

Declarations filed Monday by the Securities and Exchange Commission in connection with a civil case it brought against Dreier also indicated that some firm attorneys were concerned that escrow accounts, which Dreier controlled, had been depleted.

One named partner of an affiliated firm, Vincent Pitta of Pitta & Dreier, stated in a declaration that the firm could not meet its expenses. The reason, Pitta said, was that he and Dreier were the sole signatories to the firm’s operating account, and Pitta had only limited authority to approve spending.

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Reuters – The Hedge Fund Standards Board, the body set up to develop voluntary standards in the industry, said on Wednesday it now represents about half of hedge fund assets in Europe.

The announcement comes as hedge funds attempt to head off tougher regulation in the wake of turmoil in the global financial system.

The industry has come under intense scrutiny, most notably for the impact of short-selling employed by many managers. In September, regulators in the U.S. and Europe imposed a temporary ban on shorting financial stocks.

Ten new signatories to the HFSB include Blackrock Investment Management UK, New Star Asset Management and Sabre Fund Management. They join 14 existing members including Man Group Plc, the world’s largest hedge fund manager, GLG Partners and Marshall Wace.

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The Independent – Hedge funds have given a voluntary code for the industry a collective thumbs-down – not a single firm has signed up to the compliance standards since they were launched in January.

Nearly five months ago the Hedge Fund Working Group (HFWG) published a raft of recommendations for the sector that were intended to raise governance levels across the traditionally secretive sphere. But a spokesman confirmed last week that no hedge funds had signed up to abide by the proposals beyond the original 14 signatories, including Man Group, Brevan Howard, Och-Ziff Capital Management and CQS.

An HFWG spokesman said the body’s priority was the appointment of a permanent chair, adding that it was speaking to a number of groups that could possibly sign up to the standards.

At the publication of the guidelines in January, Sir Andrew Large, chairman of the body, said: "Now it is up to investors to help take this forward. This is a voluntary, market-led initiative based on disclosure. It is investors who can provide the market discipline to ensure these standards are widely adopted."

In April a survey by the accountants KPMG revealed that eight out of 10 pension funds favour investing with a hedge fund manager that has complied with the 28 principles of the standards set out by the HFWG. More than 50 per cent of funds surveyed said they would require hedge fund managers to comply with the standards within three years.

News of the response to the voluntary code comes as the European Parliament assesses proposals to toughen up legislation linked to the industry. The former Danish prime minister, Poult Nyrup Rasmussen, is leading a group of MEPs calling for greater openness and scrutiny of hedge funds and private equity groups.

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Tags: cnn, fund-managers, home-loans, housing-market, income-tax-credits, independent-valuation, indian-stock-market, mandatory-rules, oak-investment-partners, och-ziff-capital-management, portfolio-managers, voluntary-initiative