WEST PALM BEACH, FL (www.hedgeco.net) – Phillip Goldstein of Opportunity Partners LP has charged that the Securities and Exchange Commission exceeded its authority in passing the new hedge fund laws.According to the brief filed by Goldstein, the SEC �acted capriciously in its effort to regulate the hedge-fund industry.� Goldstein and Opportunity Partners LP are suing the SEC in connecting withthe new hedge fund laws which will fully become operational early in February 2006.
According to the law suit, the SEC Chairman initiated the hedge fund regulation laws because of his concern that the hedge fund industry had become too big an industry to ignore. The new SEC laws require US based hedge fund managers overseeing over $30 million in assets to register with the SEC. Goldstein is seeking an overturn of the new SEC hedge fund laws.
The SEC earlier vowed to fight the suit, arguing that the agency was careful not to violate any laws in drafting the new hedge fund laws. Goldman�s brief asserted, “The SEC lacks the authority to define ‘client’ to include a hedge fund’s security holders because such persons do not receive the personalized investment advice that Congress required for a person to be a ‘client’ under the Advisers Act.�
The brief also said that the SEC lacks the authority to define �client� to include the security holders of hedge funds, arguing further that such persons do not receive the personalized investment advice as intended by the congress.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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