Should hedge funds remain a private affair--or is their "anonymity" sinister?

As a House committee met to discuss regulating hedge funds, William Galvin, Secretary of the Commonwealth of Massachusetts, took up the issue with Clinton Group CEO George Hall, on "Power Lunch."

Hall, who founded the Clinton Group hedge fund in 1991, spoke for the Managed Funds Association, which he said "fully supports" the conclusions of the Presidents Working Group, which called for "shared responsibility" among investors, regulators and "counter-parties" -- but stopped short of calling for tighter regulations. Hall himself believes current fund regulation is appropriate, but called for increased due diligence on the part of investors.

Galvin "definitely" sees a need for increased hedge-fund regulation -- with "at least" registration. He explained that the funds play an "increasingly significant role" in the U.S. financial system -- with "impacts" ranging from "the mutual fund scandal" to rising energy prices.

The public official said he's particularly concerned with pensions, which more and more have turned to hedge funds for capital -- rendering their "anonymity" potentially dangerous. Galvin declared that "minimally, we need to know who they are."