The Securities and Exchange Commission seems to be on the defensive when it comes to hedge fund oversight. On the one hand, recent court decisions have slapped it hard for its previous efforts. On the other hand, Congress has shone a somewhat awkward light on the attempt to investigate hedge funds. Recall the Pequot embarrassment. While not likely to seek registration authority, the SEC may boost the requirement for investing in these funds. The key will be closing loopholes and dealing with funds of funds. Also, the commission may try to require funds to provide more disclosures to underlying investors. We'll see how this plays out. There will likely be some other wrinkles, though no one senses any fear in the industry, even though the FBI seems motivated.

For more on this:
- Here's an Investment News article