The two-day caucus, to be held May 14 and 15, brings back into the light the investigations of hedge funds that have been on the agency’s radar since May 2002 (See SEC Wrapping Up Hedge Fund Probe ). Participants of the forum, projected to be representatives from any number of the 6,000 hedge funds worldwide, are expected to discuss structure and compliance, marketing, investor protection, and whether more regulation is warranted, according to a Reuters report.
Expected to be heavily debated is the hedge funds’ use of short-selling. Even though “shorting” represent a legal market strategy, the hedge fund industry has come under fire because of how frequent the strategy is used.
Currently, the hedge fund industry is lightly regulated. However, the SEC has noted an increase in the number of fraud cases brought, from five or fewer in each year from 1998 to 2001 to 12 in 2002 and is looking into possible regulations to place on the industry.