Tuesday, May 05, 2009
Mary Schapiro
The Obama administration wants to get tough with hedge funds, but there appears to be a turf battle about who should be in charge and how far to go. The new head of the Securities and Exchange Commission is positioning herself to be the sheriff of a tough new regulatory scheme for the $1.33 trillion industry. SEC Chairwoman Mary Schapiro remarked over the weekend that her office should be given the given authority not only to register hedge funds, but also to regulate what they can buy and how much money they can borrow.
Treasury Secretary Timothy Geithner already has signed off on requiring hedge funds to register with the SEC, which means disclosing certain financial data to the federal government and being subjected to financial inspections by regulators. But Schapiro wants to go further, and perhaps force hedge funds to publicly disclose short-sale positions, impose restrictions on leveraging and limit what the firms can invest in.
Hedge funds continue to be political fodder for President Barack Obama, who last week publicly rebuked those firms that refused to go along with the bailout plan crafted for Chrysler, forcing the automaker into bankruptcy. The President labeled the holdouts “speculators” who wanted an “unjustified taxpayer bailout.”
-Noel Brinkerhoff
SEC Chief Schapiro Wants Authority to Make Hedge-Fund Rules (by Jesse Westbrook, Bloomberg)
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