Hedge Funds

GAO: SEC monitoring resources too thin


Hedge fund managers opposed to regulation who have long maintained the Securities and Exchange Commission lacks staffing resources to effectively monitor alternative funds found their position vindicated in the pages of a government report released this week.

Two Democratic Congressman, Reps. Barney Frank of Massachusetts and Paul Kanjorski of Pennsylvania, released a Government Accountability Office report which noted that SEC compliance and inspection divisions lacked the resources to detect the market timing abuses of mutual fund shares by hedge fund traders in 2003 and 2004.

Citing the GAO report published this week, the lawmakers also pointed to findings that the SEC does