Regulating hedge funds and other private investment pools: hearing before the Subcommittee on Securities, Insurance

Original publisher: Washington : U.S. G.P.O., 2010. LC Number: KF26 .B3956 2009c OCLC Number: (OCoLC)641978093 Subject: Hedge funds -- State supervision -- United States. Excerpt: ... 11 Mr. D. I would not - personally, I would not be an advo-ONOHUE cate of taking that particular approach. We have a system that works very well. We let competition reign in our country and I think that is what we should do. AYH Senator B. Thank you very much. Senator R. Thank you, Senator Bayh. EED Just let me ask one question, then Senator Bunning has addi-tional questions, and that one question follows on Senator Bayh's. Are there ongoing efforts, for example, collaborations with the FSA and others, to also deal with the issue of hedge funds and private pools of capital? ONOHUE Mr. D. We are very - first, I would say we are very active members of the IOSCO and Standing Committee 5, which is the standing committee that deals with those, is one that particularly my division provides a lot of support to. We have been in discus-sions with our counterparts about the proposal that is out there and so there is active discussion that does take place. Senator R. Thank you, Mr. Donohue. EED Senator Bunning. Senator B. I just am curious, aside from the Madoff UNNING fraud, what kinds of manipulation or conspiracies have you seen regarding private investment firms, and are the laws against that kind of activity strong enough? Mr. D. I think we have the tools to deal with those, Sen-ONOHUE ator Bunning. We have seen overstatement of performance for - in private funds - - Senator B. This was pretty sophisticated, I mean, to give UNNING out printed statements and totally and completely false statements. I mean, he had it set up - it was pretty sophisticated. ONOHUE Mr. D. It was. Senator B. Fifty billion dollars is a lot of money, or what-UNNING ever amount it was. Mr. D. I don't - we certainly had the tools to deal with ONOHUE it when it was found. UNNING Senator B. Fifteen years, though, i...