September 22, 2018

New SEC Enforcement Units Created to Focus on Hedge Funds

“The Madoff scandal has made Securities and Exchange Commission tighten its screw and have started to closely monitor any financial instrument that has been giving more returns than the market index rate, putting an extra measure of scrutiny on hedge funds in particular.

sec enforcement

The SEC has started to closely monitor the hedge funds that have been generating returns for their clients that are 3% higher than the market index rate.

Recently the SEC had set up a number of new SEC enforcement and monitoring units such as the Asset Management Unit, Market Abuses Unit and the Structured Product Unit to investigate any abnormal activity with respect to the hedge fund returns.

These actions taken by the SEC is a result information they’ve learned while investigating the Madoff scandal, as well as other recent financial scandals.

These SEC Enforcement and monitoring units have been provided the necessary rights and authorizations to get in touch with the Hedge fund owners and ask them to provide their investment profile, if their returns are found to be abnormal.

These new SEC enforcement units, as well as other new regulation that is sure to follow, will increase the cost of compliance and add a new layer of rules and complexity to small and large firms alike.”

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