Hedge Funds

Donaldson says SEC needs to be ready for hedge fund woes


The U.S. Securities and Exchange Commission needs to be ready for a hedge fund crisis that may some day threaten financial markets, SEC chairman William Donaldson told attendees at the recent economic summit in Davos.

Donaldson says that considering the rapid growth of the hedge fund industry, regulators need to take action now or be blamed later for troubles that would arise from a hedge fund-caused crisis in markets. The most likely cause of such a crisis would be leverage, he said.

The SEC chief however did not expand on how securities regulators could better guard against such worries, at