NEW YORK (HedgeWorld)–The Securities and Exchange Commission was expecting to hold public hearings this month on hedge funds, say attorneys involved in the agency’s investigation into hedge industry practices. The plan has now been derailed by Harvey Pitt’s resignation but a hearing may still be held later, they said.
No such event is currently scheduled, according to SEC officials. If a decision is made to proceed, the hearing will be announced to the public. The investment management division and its chief Paul Roye are expected to continue with the investigation. Mr. Roye announced on Oct. 17 that the process is about halfway done.
Lawyers have mentioned several possibilities as to the regulatory steps the SEC might take. One potential change is to require periodic disclosure of portfolios, as is the rule for mutual funds. The mutual fund industry has been demanding that hedge funds be subjected to similar regulations. But revealing hedge fund portfolios, particularly those that include short positions, would create a significant danger of opportunistic trading at their expense.