The real lesson here seems to be that enforcement of those regulations once again appears to have been lax, or perhaps improperly influenced, depending the facts as they emerge. The point I believe that you meant to make, that they should be required to register (as they would be under the Administration’s proposed Private Fund legislation), could be applicable in helping the SEC to discover some abuses but doesn’t seem to apply where the Commission did in fact discover the issue but failed in its responsibility for investigations and enforcement.

Thus in line with Stanford and Madoff, the real failures in the recent regulation of hedge funds were much more in the exercise of the authority granted to the SEC than in the scope of that authority.