Investors more accepting of regulation

Amy Scott Jul 15, 2009
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Investors more accepting of regulation

Amy Scott Jul 15, 2009
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TEXT OF STORY

Steve Chiotakis: Today, a group of investors, ex-regulators and analysts plan to publicly criticize the Obama administration’s plan to give more regulation power to the Federal Reserve. The Financial Times reports the group — including two former heads of the Securities and Exchange Commission —
will propose the creation of an independent body to police systemic risk.

There’s another regulation topic that Mr. Obama and Congress are looking at. For hedge funds and other private investment firms. But some insiders say, bring it on. Here’s Marketplace’s Amy Scott.


Amy Scott: Rather than fight increased regulation, some in the industry seem ready to accept it.

Andrew Lowenthal: The idea that we should have significant pockets of the financial system outside of anybody’s oversight is neither good for the country nor good for the industry itself.

That’s hedge fund industry lobbyist Andrew Lowenthal. He’s with a group called the Coalition of Private Investment Companies. Lowenthal says hedge funds recognize that more regulation is inevitable. And they’ve paid dearly to help shape that regulation.

According to the Center for Responsive Politics, hedge funds have ramped up their lobbying in the last few years. They’ve spent $16 million.

Hedge fund lawyer Ron Geffner says the worry is that in trying to appease constituents, lawmakers will overreact.

Ron Geffner: It’s like mixing a batch of drink for the first time, you’re putting in the kool-aid. You want to mix it in slowly, try it. Cause once you put it in, it’s hard to get it out.

The Obama administration wants to require managers to register with the SEC and report more information to regulators. But Congress could decide to clamp down even harder.

In New York, I’m Amy Scott for Marketplace.

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