NEW YORK (HedgeWorld.com)–The much-anticipated first lawsuit stemming from the Securities and Exchange Commission hedge fund regulation has been filed, with the claim that the agency has no statutory authority to regulate hedge funds.
The new rule requiring hedge fund managers to register as investment advisers undermines Congress's intent in passing the Advisers Act and runs counter to the commission's history of compliance with the statue, Phillip Goldstein says in a compliant filed in U.S. District Court for the District of Columbia on Dec. 21.
He describes the SEC's action as "arbitrary, capricious, an abuse of discretion." Mr. Goldstein's fund Opportunity Partners LP is a US$75 million hedge fund with more than 15 investors, which would make his investment firm, Kimball & Winthrop, one of many hedge fund investment companies subject to SEC registration rules.
Earlier this month, Goldstein called the SEC's final rule "outrageous." Of all the officials speaking out against, the new SEC rule, Mr. Goldstein has been the first to make good on his promises to challenge the regulatory agency (see )
