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