Reuters – U.S. securities regulations restrict the hedge fund industry from defending itself adequately against a bad rap in public perceptions as being secretive and prone to fraud, top hedge fundofficials said at a conference on Wednesday.
Hedge fund managers are barred by the so-called general solicitation rule from publicly discussing their fund performance, fund-raising or other matters that may be interpreted as advertising to the general public.
But hedge fund managers said the rule prevents them from educating the public about the benefits hedge funds bring to financial markets, which include increased market liquidity, better pricing of illiquid securities and general market efficiency.
“There are real restraints in our ability to respond to press articles, many of which are inaccurate,” said Steven Kessler, chief compliance officer of SAC Capital Advisors LLC, speaking on a Securities Industry Association panel discussion.
