So let’s get this straight. The Securities and Exchange Commission has contacted John Mack about its investigation into Pequot Capital Management. Sounds fine and dandy, but what the heck took so long? Isn’t the same agency that fired Gary Aguirre because he wanted to do the same thing...almost a year ago? So the SEC will question big shots, but only after a whistleblower sings to Congress? Desperate times...
If you ask me, additional regulation of hedge funds--though probably not by the SEC--is a foregone conclusion. Every day it seems there is a new hearing with a new big-shot politician proposing a new way to ‘regulate hedge funds.’ Or as one former regulator told me, “when politicians say that ‘it’s for your own good, before we do something crazy,’ look out.” Not since McCarthy’s red menace have politicians of such different stripes been in such agreement. To prove my point, when was the last time you saw a southern Republican team up with an openly gay Massachusetts Democrat? It happened last week when Congressman Richard Baker (R-La.) collaborated with Barney Frank (D-Mass.) to revamp a 1999 bill that would put the Federal Reserve in charge of monitoring hedge funds. As if Ben Bernanke didn’t have enough to worry about already...