In an interview with Reuters, senior regulator of the securities industry in the state of Massachusetts William Galvin has urged the federal government to tighten regulation of the hedge fund industry to prevent retail investors from potentially huge losses.
"I think hedge funds should be regulated," the Secretary to the Commonwealth of Massachusetts told Reuters, adding "We need to make sure that hedge funds are not being pitched to retail investors."
Galvin is particularly concerned at the number of Mutual funds that offer hedge fund style investments hoping to cash in on their often spectacular returns and noted that investment minimums have now fallen to just a few hundred dollars in some instances.
"Hedge funds started as high-altitude vehicles, but now they are common parlance," observed Galvin. "Some people just shouldn't be in them because they can't afford to lose that kind of money," he added.
Galvin's office has recently sued three hedge funds who "went after people who weren't qualified." The SEC meanwhile is still considering what level of regulation to impose on the industry after many months of deliberation.
http://www.reuters.co.uk/newsArticle.jhtml?type=topNews&storyID=3304093
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