I guess the Wild West Days are over for hedge funds. The SEC has just voted that hedge funds advisers must register with them and submit to examinations under a new rule that goes into effect in February of 2006. Reuters says that funds with less than $25 million are exempt:
"In a setback for the booming, nearly $1 trillion hedge fund industry, the SEC ordered fund managers to begin submitting basic information about the free-wheeling capital pools they administer, catering mainly to the rich and institutions. . . .
"'We know too little about this dramatically growing industry. ... What little we do know, at least to me, has alarm bells ringing,' [SEC Commissioner Harvey] Goldschmid said at the meeting.
"Hedge fund assets are up by 260 percent over five years, with hedge fund fraud also growing rapidly, SEC staffers said.
"Hedge fund advisers played a key role in the 'scandals involving mutual fund late trading and inappropriate market timing ... They picked the pockets of everyday mutual fund investors,' said SEC Investment Management Director Paul Roye."