Running a hedge fund and mutual fund simultaneously may soon be deemed a conflict of interest by federal regulators. For Vanguard, a company that has stayed clean and stayed near the top during the mutual fund scandal, that could spell trouble, CBS MarketWatch reports.

Although Vanguard itself does not run any hedge funds, the company admitted to the U.S. Senate Banking Committee that many outside firms that run its funds do have hedge funds. The company further admitted that many of those firms, if forced to choose between hedge and mutual funds, would choose hedge funds.

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