Wednesday, July 11, 2007
As a result of Goldstein v. SEC, 451 F.3d 873 (D.C. Cir. 2006), which invalidated a SEC rule requiring registration of hedge fund advisers because it viewed the investors (and not the fund) as the client, the SEC voted today to adopt a broad anti-fraud rule aimed at money managers who mislead or defraud investors in pooled-investment vehicles, including hedge funds. Chair Cox said the new rule would be "an important tool" to help police hedge funds. While voting in favor of the rule, Commissioner Atkins wished it could have been more narrowly tailored. See WSJ, SEC Adopts Fraud Rule Affecting Hedge Funds.