Client Alert
SEC Hosts Roundtable Discussions Concerning Hedge Funds
June 01, 2003
Investment Management Practice Group
On May 14-15, 2003, the Securities and Exchange Commission hosted a roundtable in Washington, D.C. to discuss a number of issues relating to the operations of private, unregistered investment pools, commonly known as “hedge funds.” The roundtable discussions were part of the SEC’s formal fact-finding investigation of the hedge fund industry, which it began in May, 2002, with a view to determining whether the current regulatory scheme for hedge funds is adequate. The SEC had raised concerns about what it perceived as increased enforcement actions involving hedge funds, marketing efforts directed at ordinary retail investors, and other conflict issues arising in connection with the operation of hedge funds. The SEC’s investigation also appeared to be spurred on by Congressional inquiries in recent months regarding the operation of hedge funds.