Wanted: Hedge fund pros to police hedge fund pros

Wanted: Hedge fund pros to police hedge fund pros
The SEC aims to add more enforcement agents and examiners to its hedge fund speciality unit. With 700 hedge shops closing in 2009, there should be shortage of applicants.
APR 02, 2010
Just as hedge funds are celebrating another month of positive inflows and marginal performance gains, the Securities and Exchange Commission is gearing up add more than 30 new investigators to its New York office — to focus on such firms. To do that, the agency is looking to attract former hedge fund types and analysts with hands-on investment experience, George Canellos, the SEC's regional director for New York, said last week at a Reuters-sponsored private equity and hedge fund conference. The new hires would be more or less evenly split between enforcement agents and examiners, with an emphasis on finding “senior market specialists” to fill the roles. Last year's closure of more than 700 hedge funds means there's probably a ready-pool of potential applicants. At least that's what Mr. Canellos is banking on. SEC's investigations staff is typically made up of lawyers with securities law experience and accountants with forensic specialties. But the Bernard Madoff Ponzi scheme and other recent debacles exposed some of the agency's weaknesses, namely that it didn't have enough financially sophisticated staffers to keep pace with ever more complex investment vehicles being packaged and sold on Wall Street. In response, the agency's director of enforcement started assembling specialty units to focus on areas like asset management, structured products and market abuses. President Barack Obama's proposed 2010 budget provided for an 11% increase in funding for the agency. The recently announced hires would swell the New York office to about 390 employees. [This story first appeared in Crain's New York Business, a sister publication of InvestmentNews.]

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