Hedge Fund Woes After U.S. Crackdown Don’t Surprise SEC’s Chair
- Insider trading may have boosted some returns, White says
- Funds have trailed S&P 500 since Rajaratnam’s 2009 arrest
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Hedge fund returns have fallen off a cliff since U.S. prosecutors and regulators initiated a sweeping crackdown against insider trading in recent years. Securities and Exchange Commission Chair Mary Jo White is among officials who’ve taken notice.
“I don’t think anyone would argue that some of those returns at some hedge funds, and I don’t want to paint with too broad a brush, can be attributable to obviously trading on insider information that one is not allowed to trade on,” she said in a Thursday interview on CNBC. White made the comments in response to a question about whether there was a link between lackluster hedge fund performance and the government’s aggressive enforcement.