International Herald Tribune – Draft legislation being circulated by Senator Arlen Specter, the chairman of the Senate Judiciary Committee, and written to prevent insider trading, would require hedgefunds that accept pension-fund money to register with federal regulators.
The proposal would also require hedge funds to set up ethics codes and compliance programs, as well as allow the U.S. attorney general to give private citizens rewards for helping prosecutions of insider trading cases.
The draft has not yet been introduced and there are only a few days left to pass a version of it in this Congress. Still, it is the latest sign of congressional concern about regulators’ inability to track hedge funds. Such a bill would mean many funds would again be subject to federal inspection, after a June court ruling struck down an earlier requirement.
Specter “has raised a lot of questions of regulators and this is his way of saying, ‘I want you to do a better job so here’s the arsenal,'” said Barry Barbash, a former U.S. Securities and Exchange Commission official. “This kind of bill is designed to be something of a legislative discussion piece. He is putting out ideas.”
