WEST PALM BEACH, FL (www.hedgeco.net)- William Donaldson, the Chairman of the Securities and Exchange Commission recently scolded the role of Hedge Fund Lawyers for their activities in the recentmarket timing scandals and late trading abuses which recently rocked the industry. Mr. Donaldson was speaking at the at the Practicing Law Institute’s annual SEC Speaks conference. He said, “Thinkhow much anguish we could have avoided if a few more lawyers had pointed out to their hedge fund clients that late trading of mutual fund shares is illegal, as are duplicitous market-timingarrangements. He added �Those of you who advise hedge funds have a particularly good opportunity to help your clients by promoting their ethical business behavior.”
Donaldson also said his agency has been trying to stop such activities by requiring hedge fund managers to register with the SEC. Such registration will automatically enable the SEC to examine the books of such firms in periodic intervals. But two other SEC Commissioners, Cynthia Glassman and Paul Atkins, both pointed out that late-trading and market-timing abuses occurred despite the requirement that mutual funds register with the agency. Both Commissioners are on record for opposing the SEC hedge fund initiative, which however was passed last year with a 3-2 split vote.
The SEC Chief accountant Donald T. Nicolaisen also spoke at the conference. According to him, the Accounting Division of the SEC will provide some guidance on some aspects of the new law requiring firms to �to expense employee stock options just like salaries or any other compensation�.
Nicholaisen noted, �We received a request to provide implementation guidance, and we hope to be helpful in attempting to accurately and reasonably measure stock options.” Nicolaisen also explained the new guidance may be released in time before the first quarter earnings season starts.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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