According to an article in Reuters, a lawyer from the NASD, announced on Wednesday that the NASD is going to work harder to identify solicitation of hedge funds to retail investors. 

Hedge funds are not heavily regulated, however, they are banned from asking for funds from any investors, except those with at least $1 million in liquid assets. 

According to the Reuters report, returns are slowly dropping in the industry, which has a total of approximately 8,000 funds and $1 trillion in assets. Some hedge fund managers may be tempted to dishonestly increase their assets and fees, by soliciting retail investors, as per Gary Goldsholle, NASD associate general counsel, Regulatory Policy and Oversight.

"There is a concern that this asset class is expanding down-market," Goldsholle told several hundred lawyers and others at a Securities Industry Association conference in New York. "It may be because returns are not there," he added.


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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