WEST PALM BEACH, FL (www.hedgeco.net) – In the wake of the Bayou Hedge Fund collapse of the past week regulators in Connecticut continue to weigh additional possibilities of increased regulations for hedge fund managers operating from the state. According to the Associated Press news reports, details of losses resulting from the collapse of Bayou Hedge fund shows that the Jewish Federation of Metropolitan Chicago is also among investors in the failed fund.
The organization is waging a battle to recover more that $4 million invested in the Bayou Group. A law suit has been filed by the League but details were not provided by the attorney representing the organization. Federal and State authorities have brought more enforcement action against 51 hedge fund managers during the past 5 years. The cases altogether involved about $1 billion in investor losses.
The SEC says it is troubled by the growing cases of hedge fund fraud, in light of the growing exposure of pension funds and smaller investors to hedge funds. Through such arguments the agency introduced and passed new hedge fund regulations last year which will go into effect in early 2006.
According to attorney Ross Intelisano who represents nine Bayou investors, some of those investors losing their assets in the failed Bayou have also lost a significant level of their net worth which also includes retirement money. But it remains to be seen if such new developments could lead to additional scrutiny for the hedge fund industry. Most hedge fund industry participants believe the industry has done a good job of self regulation, and that problems of a few bad crooks operating as hedge fund managers should not be used to judge over 99 percent of well qualified and honest hedge fund managers overseeing their investor’s assets. Many in the industry don’t believe that additional regulations are imminent in light of the improved transparency of hedge funds today.
Paul Oranika
HedgeCo.Net
Email: Editor@hedgeco.net
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