by The Compliance Exchange on April 11, 2012
From Wall Street Journal:
The top U.S. securities regulator has started to sift through a trove of new data on the nation’s largest hedge funds and other private money managers to help identify firms whose behavior might pose the greatest risks to their investors.
“Pick your fraud of the day and the question is, ‘Can we extract information from this data system together with the other databases we have access to and home in on problems before they do damage?’” said Robert Plaze, deputy director in the division of investment management for the Securities and Exchange Commission.
About 1,400 new firms, including Moore Capital Management and Tiger Global Management, disclosed new details on their funds, investors, brokers and other facts ahead of a March 30 deadline.
The Dodd-Frank financial overhaul included a provision requiring hedge-fund, private-equity and other private-fund advisers of a certain size to register with the SEC, in a bid to bring more transparency to one of the more secretive corners of Wall Street. The SEC is using the new disclosures to beef up the data it streams through its analytics to look for signs of trouble.
For one, the regulator now can zero in on funds that might pose greater risks to investors, including those that mark the value of their assets themselves rather rely on independent valuations.
Other information found in the advisers’ disclosures, including the names of their prime brokers and auditors, can prove useful to the SEC, too.