Stale pricing has not yet become a problem in the hedge fund industry – as it has for mutual funds, but still could catch the eye of regulators as the potential for abuses exists, Dow Jones reports.

Hedge funds report on their performance on a monthly basis, a matter that is complicated by the fact that the funds often hold illiquid securities that take a long time to calculate and verify by an independent auditor. Funds-of-hedge funds can take even longer because they have to gather information from several hedge funds.

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