We’ve no doubt that the Bernie Madoff fiasco will increase calls for closer oversight of the hedge fund industry… Except it’s worth pointing out that Madoff didn’t run one of these much-maligned, unregistered hedge funds. He was registered with the SEC. Here’s his latest 13-F, which looks perfectly normal.
What protections did Madoff clients get from that? Apparently, nada. Despite the fact that Madoff has been under suspicion for years, the SEC didn’t do anything until the firm came clean itself.
If anything, the fact that Madoff was registered with the SEC might’ve made clients more willing to place their money with him. Yeah, he’s a little shady, but he’s SEC-registered.
So when they bring hedge fund managers up on the hill again to bring this topic up, hopefully someone will ask what SEC oversight is supposed to accomplish?
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