This summer, when a federal appeals court overturned a rule instituted by the Securities and Exchange Commission to force hedge funds to register with the SEC and disclose details of their size and operations, disappointed critics saw it as a blow to lifting the veil on this secretive niche of the financial services world.
The reality, however, is that even without the SEC registration rule, hedge funds increasingly are subject to a wide range of regulations mandated by federal and state authorities, from the SEC to the Treasury Department to the Commodities Futures Trading Commission and more. “It’s a misnomer that hedge funds are totally unregulated,” says Sylvie Durham, an attorney with the law firm Greenberg Traurig who has spent more than 20 years working with hedge funds.
