West Palm Beach, FL ( www.hedgeco.net ) – Officials in the state of Connecticut are discussing the formation of a task force to examine the possibility of reforming the state’s hedge fund laws. Such action is a response to the problems of one of the state’s hedge fund and brokerage firm, which is being investigated for fraud. According to the report, a task force will be formed to examine the matter, and issue recommendations to authorities.
Connecticut is home to several big hedge fund operators. The state’s closeness to the major financial markets has been found as a convenient location by many hedge fund managers.
Connecticut’s attorney general Richard Blumenthal told news reporters that such action could have major ramifications for the hedge fund industry. Blumenthal said, “I think it may be a defining moment in the hedge fund industry’s development.” Adding, “This instance may be simply one major alarm bell for the broader public.”
Blumenthal as well as the banking commissioner of the state, will head the new task force. It is a direct response to the problems of the Bayou Hedge Fund Group, whose founder, Samuel Israel III, informed investors he will be returning their investment money back and would be folding the doors of the firm.
What is still unclear about the additional regulations by the state is how such a move would affect the new hedge fund laws passed last year under the former Securities and Exchange Chairman William Donaldson. It is likely that such a move by the state may likely be seen as a signal for other state regulators as well. No further details about Connecticut’s plans have been released.
Paul Oranika
Contributing Writer
HedgeCo.Net
Email: Editor@hedgeco.net
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