GO
Loading...

Is Much Tighter Hedge Fund Oversight Ahead?

So far, hedge funds have been able to avoid scrutiny in the wake of the financial crisis. But that may be about to change.

So says author Stephen Gandel in an article he penned for Time magazine.

Years from now the fraud charges facing Goldman Sachs will likely be long forgotten – but their legacy may live on – in the form on increased regulations – especially for hedge funds, according to Gandel.

As we first told you on Friday the SEC filed civil charges against Goldman alleging that the firm did not tell investors "vital information" about a financial instrument made up of subprime mortgages -- including the fact that the hedge fund run by John Paulson was involved in choosing which securities would be part of the portfolio.

“The revelation of the role hedge funds played in helping to create the most poisonous of the toxic assets leading up the financial crisis is sure to spur calls for increased regulation of hedge funds,” writes Gandel.

”If hedge funds had regularly reported their holdings and trades to the SEC, or had just been made public, it is possible that regulators would have caught on to the incredible risk and, at least in the Paulson case, alleged fraud in these deals.”

We found Gandel’s article so intriguing we invited him to join us on Fast Money. Find out what else he had to say about these sensitive circumstances. Watch the video above.

* And it’s worth noting that Goldman responded to the charges, saying they were "completely unfounded in law and fact."

Read more:
How the Goldman Case Sheds Light on Hedge Funds
by Stephen Gandel



______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to fastmoney@cnbc.com.

Trader disclosure: On Apr 19, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Karabell Owns (GS), (C), (IBM), (FCX), (MON); Jon Najarian Owns (XLF) Put Spreads; Jon Najarian Owns (MS), Is Short (MS) Calls; Jon Najarian Owns (BAC), Is Short (BAC) Calls; Jon Najarian Owns (C), Is Short (C) Calls; Jon Najarian Owns (JPM), Is Short (JPM) Calls; Jon Najarian (CME), (CME) Puts; Jon Najarian Owns A Seat On CME; Jon Najarian Owns (MCO) Puts; Grasso Owns (DYN), (LPX), (ASTM), (ABK), (AAPL), (BAC), (BGP), (C), (CVGI), (COST), (JPM), (NEM), (PRST), (WMT), (PFE), (BA), (T); Seymour Owns (BAC), (AAPL), (BAC), (FXI), (MSFT), (MPEL); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Pete Najarian Owns (C) Calls; Najarian Owns (YHOO) Calls; Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman Owns (BAC), (BAC) Preferred; Finerman's Firm Owns (BAC), (BAC) Leaps; Finemran's Firm Owns (GLW); Finerman's Firm Owns (IBM); Finerman's Firm And Finerman Own (JPM); Finerman's Firm Owns (WFC) Preferred

For Tim Seymour
Seygem Asset Management Is Short (DB), (X), (VALE)
Karabell Owns (MON)

For Brian Kelly
Kanundrum Capital Owns (RAX)
Kanundrum Capital Owns (S)
Kanundrum Capital Owns (TLT)
Kanundrum Capital Owns (MORN)
Kanundrum Capital Owns (BX)
Kanundrum Capital Is Long U.S. Dollar
Kanundrum Capital Is Short (CME)
Kanundrum Capital Is Short Euro
Kanundrum Capital Is Short Yen
Kanundrum Capital Is Short Pound
Kanundrum Capital Is Short (XLV)

For Dennis Gartman
Funds Managed By Dennis Gartman Are Long Gold Futures
Funds Managed By Dennis Gartman Are Long Canadian Dollar And Australian Dollar

For Mike Khouw
Cantor Fitzgerald & Co. Is A Market Maker In (YHOO)

For Steve Grasso
Stuart Frankel And Its Partners Own (CUBA)
Stuart Frankel And Its Partners Own (GERN)
Stuart Frankel And Its Partners Own (HSPO)
Stuart Frankel And Its Partners Own (MERC)
Stuart Frankel And Its Partners Own (NWS.A)
Stuart Frankel And Its Partners Own (NXST)
Stuart Frankel And Its Partners Own (NYX)
Stuart Frankel And Its Partners Own (PDE)
Stuart Frankel And Its Partners Own (PFE)
Stuart Frankel And Its Partners Own (PRST)
Stuart Frankel And Its Partners Own (RDC)
Stuart Frankel And Its Partners Own (TLM)
Stuart Frankel And Its Partners Own (XRX)
Stuart Frankel And Its Partners Own (SDS)
Stuart Frankel And Its Partners Are Short (QQQQ)
Stuart Frankel And Its Partners Are Short (CL)
Stuart Frankel And Its Partners Are Short (AAPL)





CNBC.com with wires

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET

Halftime Report

  • Bill Nygren, Oakmark Fund, explains why Apache, Bank of America and Google will be winners in 2015.

  • Nick Tiller, Sustainable America founder and chairman, tells CNBC's Kate Kelly oil prices are poised for a tradable rally. Tiller likes the Brent ETF and energy sector.

  • Discussing interesting trends contributing to the market's rally into year's end, with the FMHR trader Josh Brown and Dan Greenhaus, BTIG.