TheSecurities and Exchange Commission requires hedge funds and mutual funds with more than $100 million in equity assets to disclose their holdings every three months, but hedge fund manager Philip Goldstein thinks the practice should stop, according to Forbes. Goldstein runs a couple of hedge funds that recently topped $100 million market in assets under management. He is petitioning the SEC to get exempted from the disclosure law. His argument being that his investments are his intellectual property—trade secrets that the SEC should not force him to reveal. It will be a tough battle for Goldstein, as the SEC is trying to get tougher with the $2 trillion hedge fund industry. However, he did win a high-profile suit to stop a rule that would have required hedge funds with more than $25 million in assets to register as investment advisors. In 1975 Congress passed the 13F disclosure rule, when many regulators had become wary about the impact of institutional mangers on the market. Goldstein argues the SEC has made virtually no use of the disclosures, yet says newsletters and others urge investors to parse fund holdings to “steal” ideas for stock picking. “All the evidence indicates that 13F filings are used by the public for only one reason: to obtain, without compensation, the trade secrets of successful filers,” he wrote. Goldstein fully expects the SEC to turn him down, in which case he will proceed to court, he said. He finances such litigation with his and his partner’s money, having spent nearly $300,000 overturning the hedge fund rule. The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.
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