Hands Off Hedge Funds, Appeals Court Tells SEC

Law360, New York (June 23, 2006, 12:00 AM EDT) -- The U.S. Securities and Exchange Commission’s authority to regulate the $1.1 trillion hedge fund industry has been struck down, with an appeals court calling the agency’s oversight of hedge fund managers “arbitrary.”

The U.S. Court of Appeals for the D.C. Circuit ruled that the SEC’s new requirement that hedge fund managers register with the agency cannot stand. The court vacated the rule and sent it back to the Commission.

The ruling marks a surprising victory for plaintiff Philip Goldstein, a hedge fund manager with Opportunity Partners...
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