The SEC Warns Hedge Funds: If You Beat The Market By 3%, We Are Looking Into You

Pretty remarkable. If you beat the market, expect the SEC to come calling, as part of its new job of regulating hedge funds.

Dow Jones:

The U.S. Securities and Exchange Commission is scrutinizing hedge funds that consistently offer above-market returns amid a concern about whether outsized returns are a result of malfeasance, but budget constraints could hamper the agency.

“We’re now doing things like canvassing all hedge funds for aberrational performance,” SEC enforcement director Robert Khuzami told a House Financial Services Committee subcommittee Thursday. He said the focus was on “anybody who is beating market indexes by 3% and doing it on a steady basis.”

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