SEC Investigates Hedge Fund Insider Trading

There is lots of interesting research around hedge funds and social networks, including how many funds in similar geographies unexpectedly end up in similar stocks. But that kind of social network isn't what interests the SEC of late, it's another more insidious kind:

The U.S. Securities and Exchange Commission is examining hedge funds for signs of insider trading, demanding information about relationships between managers, employees, family members and public companies. SEC officials told hedge funds to list clients and workers who serve as officers or directors of publicly traded companies, along with the names of any relatives who hold such posts, according to a 27-page letter to industry executives obtained by Bloomberg News.

And there's more:

In addition to information about officers and directors, the SEC wants the identities of any relatives who work at brokerage firms, as well as a detailed description of any "deal" that a fund manager "was asked to consider" and turned down "because the proposal was deemed inadvisable, inappropriate, unethical, or possibly illegal." The letter asks for e-mails and contact information for all involved.

An amazing request, one that sure seems like over-reach to me. Of course, this only applies to hedge funds that have registered with the SEC, which is already in decline, and is almost certainly now going to decliner further given this sort of info fishing.

[via Bloomberg]

Comments

[ussmls7:]

THERE IS MORE THAN HEDGE FUNDS THAT NEEDS TO BE PUT IN THE LIGHT OF THE INVESTIGATIONS, THE SHORTS ON SILVER & GOLD? MR BUTLER HAS INQUIRED ABOUT A FEW 4 OR 5 OR LESS THAT HAVE SURPRESS THE REAL PRICE OF BOTH PMS. THE LITTLE TRADERS ARE BEING MADE TO REACT TO THE PRICE OF THE PMS , BULLION BANKS, CENTRAL BANKS, & THESE THAT ARE SHORT HAVE NOT TAKING DELIVERY OF THOSE CONTRACTS , THATS THE WAY I READ HIS COMMENTS ON THIS MATTER.IS BARRONS & OTHERS LIKE BARRONS IN ON THE SURPRESSION OF SILVER & GOLD? GATA IS TRYING TO KEEP PEOPLE UP TO DATE ON THESE MATTERS. PLEASE READ ALL OF MR BULTER'S POST ON SIVERSEEK.COM

2007 Sep 19 11:36 AM