Monday, March 23, 2009

SEC Examines Preferential Treatment in Hedge Fund Redemptions

In a prepared testimony to the House Financial Services Committee, SEC Commissioner Elisse Walter said that the SEC is examining whether fund managers or advisers let favored clients or employees withdraw their invested capital while freezing redemptions or liquidating funds. Commission Walter stated that there is a "particular concern as to whether hedge fund advisers may be favoring their own interests above others and whether principals, employees or favored investors of the hedge fund adviser may have received 'preferential redemptions' from the fund at issue."