No need to fear SEC clean-up

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Talk to a roomful of hedge fund managers about what will come out of Washington next and many will express genuine alarm. The perception is that Congress, in its zeal to crack down on mutual fund abuses, will crack down hard on hedge funds as well. In the wake of the market-timing scandal, some fear that Congress will force mutual funds to divest their hedge funds, or even worse.

Much of this concern has been massively exaggerated. Here's a reality check: the mutual fund scandal will probably leave hedge funds largely unscathed. Congress has rightly targeted mutual funds.