SEC Giving Heightened Scrutiny To Hedge Fund Trading

This article was originally published 30 September, 2008

In the wake of the growing turmoil and uncertainty in the financial markets, the Securities and Exchange Commission (the "SEC") and other regulators are being more vigilant and aggressive in conducting investigations and examinations of hedge fund advisers. For example, on September 17, SEC Chairman Christopher Cox stated: "Director Thomsen and the Division of Enforcement will . . . expand their ongoing investigations by undertaking a series of additional enforcement measures against market manipulation. The Enforcement Division will obtain disclosure from significant hedge funds and other institutional traders of their past trading positions in specific securities. Those institutions will also be required immediately to secure all of their communication records in anticipation of subpoenas for these records." SEC Director of Enforcement Linda Thomsen added, "We are committed to using every weapon in our