Hedge Funds Review Magazine- Bulldog Investors, a group of hedge funds, has challenged the US Securities and Exchange Commission (SEC) in court over its prohibition of “open” websites for hedge funds. Philip Goldstein, who runs the Bulldog fund, says the SEC ban on websites infringes the first amendment to the US constitution. This amendment guarantees freedom of speech.
Current SEC policy requires hedge fund websites to screen users so that anyone other than accredited investors cannot access information. This effectively bans the press, academics and the public from getting any information from US hedge fund websites.
Goldstein claims there is “significant uncertainty” as to whether a hedge fund can legally operate an open website – one that is accessible to the public – and respond to enquiries. He said the SEC rules prohibit a public offering to be made without filing a registration statement with the SEC but should not extend to merely informative websites.
