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.

Raising net worth requirements for investing in hedge funds and requiring the funds to register with the SEC are among the other possibilities that the SEC may consider. Some fund managers are registered investment advisers but most are not. Mr. Roye has expressed concern about registered funds of funds that are open to a broad section of investors. New rules may be imposed on hedge funds that these types of pools invest in.

Some experts decline to make any predictions–perhaps because the situation is too volatile to call. Marianne Smythe, who once walked in Mr. Roye’s shoes as the head of investment management at the SEC and is currently responsible for that area at Wilmer, Cutler & Pickering, will describe only best and worst scenarios that will not happen but define the extremes of the spectrum of possibilities.

The agency is not going to ask Congress to ban hedge funds and is not going to publicly announce that hedge funds are uniformly wonderful, she quips. Between these extremes, “Your guess is as good as mine as to what the SEC might do.”