John Gaine, president of the Managed Funds Association, said the current regulatory environment concerning hedge funds is “calm,” Dow Jones reports. But he warned attendees at the MFA Network 2007 Conference in Key Biscayne, Fla., recently that one misstep, and the industry could face a rash of new rules.

In particular, Gaine pointed out recent comments by Connecticut Attorney General Richard Blumenthal that hedge funds “remain a regulatory black hole.”

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