Investment Company Institute President Paul Schott Stevens said in Boston this week that hedge funds should be more harshly investigated by the Securities and Exchange Commission, CBS MarketWatch reports.

In a speech to journalists, Paul Schott Stevens said hedge funds have been a huge part of the problem that commenced last September and has continued for more than one calendar year.

"A lot of hedge funds had strategies designed to pick the pockets of ordinary fund investors," Stevens said. "I hope the SEC goes after hedge funds, and that hedge funds provide restitution to mutual fund investors." Specifically, Stevens said he supports SEC Chairman William Donaldson’s proposal that hedge funds be required to register as investment advisors.

The ICI president also admitted that the problems of the past year will not go away quickly. "Right now, there are more issues facing mutual funds than at any time in the past," Stevens said. "We have a real challenge to put the industry back on its feet."

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