Posted on 09/27/2004 5:15:39 AM PDT by OESY
It isn't often that a Securities and Exchange Commission chairman has the ability to unite against him -- his own White House, fellow GOP commissioners, leading financial lights in Congress and Federal Reserve Chairman Alan Greenspan. But Bill Donaldson is nothing if not determined.
The SEC chief has devoted much of the past year to promoting a new regulation that would force hedge fund advisers to register with his agency, despite opposition from just about anyone who knows a hurdle rate from a drawdown. Most recently, his staff conducted a short "comment" period on the rule when most of the industry was on vacation. And with his efforts still not winning converts, Mr. Donaldson has lately resorted to warning that hedge funds -- investment pools for institutional and rich investors -- are somehow rife with criminal activity.
This takes some doing, since as recently as 1999 a commission appointed by Bill Clinton in the wake of the Long-Term Capital Management failure advocated leaving hedge fund advisers alone....
It's hard to resist the conclusion that this entire hedge-fund exercise is little more than empire-building by the SEC staff. Having missed the mutual-fund scandal, they know better than even Mr. Greenspan that they have little ability to ferret out hedge-fund fraud, their 46 smalltime cases aside. But with more oversight comes greater job security and more Congressional cash. Rather than temper this bureaucratic impulse, Mr. Donaldson seems willing to go along for the ride.
Still, he has an out. The comment period for the rule recently ended, and even a quick perusal shows that the majority of the substantive replies were critical of registration. Mr. Donaldson would do well to use this widespread criticism as political cover to save further embarrassment at the hands of his peers, and drop the whole thing.
(Excerpt) Read more at online.wsj.com ...
When I saw the headline I assumed it was going to be about college football's Southeastern Conference.
Florida State and Miami are in the ACC.
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