SEC moves to prevent hedge fund fraud

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The Securities and Exchange Commission has adopted a new antifraud rule that restores enforcement powers called into question last year by a court ruling that had voided an attempt by the commission to bring more hedge funds into its sphere of regulation.

The new rule, which was approved in a unanimous vote, authorizes the Commission to take action when investment advisors who manage pooled assets, such as hedge funds, make intentionally misleading statements, regardless of whether the advisors have registered under the Advisers Act.

The decision by the U.S. Circuit Court of Appeals in Phillip Goldstein, et al. v.