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S.E.C. Meets Over Hedge Fund Debate

Tuesday, 12 Dec 2006 | 1:38 PM ET
AP

We have more opinions on the regulation of hedge funds. Tomorrow (Wednesday) the S.E.C. meets to consider new rules for hedge funds--which S.E.C. Chairman Christopher Cox calls "risky investments that are not for mom and pop." This year's Amaranth meltdown would seem to support that view (Amaranth lost $6.5 billion in one month in 2006).

But as we've been writing--some argue that the trillion dollar hedge fund industry is good for investors and good for the markets.

Yasho Lahiri--Partner and Head of Hedge Fund Practice at Baker Botts and Damon Silvers who is the Associate General Counsel at the AFL-CIO took on the issue of hedge fund regulation on "Power Lunch."

Silvers says that what regulations are in place for hedge funds--is simply not enough--and that the funds are risky. He says that doesn't mean a whole sector would feel an effect of a hedge fund collapse--but like Enron --the failure would erode investor confidence and bring a crisis to public securities.

Lahiri believes there are enough regulations in place for hedge funds--and that the market would resolve any issues that come up--as he says it has. He points out institutional investing is driving the hedge fund industry-and that basically allows some protections--with institutional managers making sure their investments are safe as possible.

Regulating Hedge Funds
Discussing tomorrow's SEC meeting to consider new rules for regulating hedge funds, with Yasho Lahiri, Baker Botts Head of Hedge Fund Practice; Damon Silvers, Associate General Counsel AFL-CIO; and CNBC's Sue Herera,

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  • Sue Herera is a founding member of CNBC, helping to launch the network in 1989. She is co-anchor of "Power Lunch."

  • Tyler Mathisen co-anchors CNBC's "Power Lunch." Mathisen also co-anchors "Nightly Business Report produced by CNBC."

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Kenny Polcari