The mark-to-market accounting that has caused Wall Street so
much grief this year is coming to hedge funds in 2009 By Irwin
Speizer When the plunging value of subprime mortgages caught
Michael Vranos short last year, investors began lining up to
get their money back from his Ellington Capital Management.
Vranos responded by halting redemptions, arguing that the
mortgage-backed securities he held were too difficult to
Vranos and other hedge fund managers won't have the luxury of
taking a flyer on current fair-value assessments much longer.
The new accounting rules that have forced Wall Street firms to
mark to market their toxic securities, taking down Lehman
Brothers and pummeling the rest of the industry, will go into
effect for hedge funds next year. Under the new Financial
Accounting Standards Board Rule 157, hedge funds will have to
disclose how much of their holdings fall into three distinct
categories, including one for...