The SEC’s Real Public Function

The SEC’s regulatory function is protecting those who are not fully aware of conventional investment information or knowledge.

                       

Investors in hedge funds ordinarily are not the usual mutual fund investors. It’s strange, therefore, why SEC watchdogs have taken time to look into such questions as “side-pocket” arrangements” that hedge funds made with their more sophisticated investors. Using them, funds may, for instance, limit the ability for hedge investors to prematurely cash in their stakes. Or for that matter, regulate them as tightly as they are under the Dodd-Frank Act.

                       

Hedge funds are not mutual funds. That is why some investors choose to use them. Hedge fund managers do not want to tip their investing hand as SEC regulations require, unless the hedge funds are “family-owned; as I have commented on before. (See the Earl J. Weinreb NewsHole® comments and @BusinesNewshole at Twitter.)