Hedge Funds Get 'Sweet Deal' in Finance Bill

Thanks to an army of lobbyists, they've dodged reforms
By Kevin Spak,  Newser Staff
Posted May 3, 2010 8:28 AM CDT
Hedge Funds Get 'Sweet Deal' in Finance Bill
John Paulson, president of the hedge fund Paulson & Company, Inc., held a huge fundraiser for Senate Banking Committee members last year.   (AP Photo/Kevin Wolf)

While Wall Street banks are being hauled before Congress for public reprimand, hedge funds and private equity firms have floated blissfully above the fray, thanks to an army of well-connected lobbyists. More than half of the 83 new lobbyists who signed up with the industry's two main trade groups last year came from government jobs, Politico reports. That includes three former members of Congress, and several former top staffers for the Senate Banking Committee.

The industry spent $7.3 million on lobbying last year, and another $2 million in the first three months of this year, so the financial reform bill leaves it relatively unscathed. Under it, regulators would be able to examine hedge funds' books, but not demand changes. It's “a pretty sweet deal,” says the head of one consumer group. “There's no question they've gotten a free ride.” But the industry counters that it simply doesn't pose a systemic risk, and hence needn't be regulated. (More hedge fund stories.)

Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.