Securities: SEC Proposes Additional Hedge Fund Regulations

The United States Securities and Exchange Commission (SEC) announced proposals that would increase the number of anti-fraud regulations for hedge funds. Additionally, in an effort to limit retail investor's ability to use hedge funds, the SEC proposes a new category of accredited investor. This proposal was drafted by an SEC financial regulator in response to a decision by the U.S. Court of Appeals.

SEC To Strengthen Rules on Hedge Fund Fraud And Qualifying Investors

Earlier this year, the U.S. Court of Appeals determined that current SEC registration requirements for hedge fund managers are invalid. The newly proposed regulations address this decision and reemphasize that the SEC has the authority to pursue criminal action against investment advisors who mislead or defraud investors regarding hedge funds or pooled investment vehicles. The new regulations will apply to investment advisors even if the advisor is not registered with the SEC.