The Raj Rajaratnam arrest has hedge funders waiting for the next shoe to drop. Now someone who actually understands their business is going to be in charge of examining it.
The SEC named Noam Champ, the general-counsel to a multi-million dollar hedge fund Chilton Investment Co. to lead its New York examinations group. The investment group reviews investment advisers, hedge funds included.
With the Raj Rajaratnam case appearing to put hedge funds front and centre as an SEC target — and of course the cloud of failure surrounding the agency due to missing the whole Madoff scheme — they needed a man who knew how things worked. As The Wall Street Journal notes, the SEC is making an effort to recruit examiners and attorneys with Wall Street experience.
“Norm brings to our inspection program an unusual diversity of experience — as general counsel of a multibillion-dollar hedge fund complex, as a university lecturer, and as a policy thinker,” the director of the SEC’s New York office, George S. Canellos, said.
Time will tell, of course, if he is too close to the industry to truly go after it. But maybe the man for the job is someone who knows the business but is a bit of an outsider to the game, in that he has been charged with both reining in hedge funders and knowing the best ways of staying just on the right side of the law.
The SEC’s press release is here.
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