WEST PALM BEACH, FL (www.HedgeCo.Net) – The Securities and Exchange Commission new hedge fund laws may soon be challenged in a court of law, in an effort to stop the new laws from being implemented.According to published reports, the law suit may be instituted in the U.S. District Court for the District of Columbia. The legal action will charge that the new SEC acted outside its legalboundaries when it passed the measures requiring US Hedge fund managers to register its activities with the agency.
The law suit will be introduced by Phillip Goldstein, of the New York based Opportunity Partners. Goldstein said, “This is not something the SEC can make a rule about, they don’t have the authority. They are overreaching.”
The new hedge fund law according to the SEC would help the agency to �collect basic information about hedge funds and hedge fund advisors, including the number of hedge funds operating in the U.S., the amount of assets, and the identity of their advisors.� In addition, the SEC also wants to �examine hedge fund advisors to identify compliance problems early and deter questionable practices.�
Right from the introduction of the new proposals and passage, members of the US Hedge fund industry and other groups have questioned the validity of the laws, and it was widely expected that some legal action may be filled to stop such laws which many in the industry regard as burdensome and unnecessary.
Goldstein further said, “If I have to spend my time dealing with lawyers and examiners from the SEC coming in on some sort of fishing expedition and filling out forms and checklists, it’s not going to do our investors any good, and it’s going to take away time that I spend making money for the partnership.� Goldstein�s hedge fund company manages about $75 million in investor assets. Matt Well, an SEC spokesman stated, “The commission feels that it complied with all the applicable legal requirements.� These new legal impediments may delay the expected February 6, 2006 deadline for the law to become effective.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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