Hedge Funds Prepare for Political Battle

Although an appeals court recently rejected a regulation forcing hedge funds to register with the SEC, many fund managers are beginning to feel the heat from government regulators. As such, many hedge funds are stepping up lobbying efforts in Washington, D.C., in hopes of fending off new regulations from Congress or the SEC. Currently, hedge funds operate in an environment with relatively little oversight. But due to huge returns and the use of sophisticated, unconventional tactics, the government is beginning to take a closer look. 

It was only a matter of time before the SEC decided to go after this innovative sector with their cumbersome, costly regulations. If the government does succeed in expanding their control over hedge funds, let’s hope they don’t overregulate as they have done so many times in the past.