Regulation

Ponzi scheme victims would have recourse to millions in new tax breaks under a bipartisan proposal introduced yesterday in the U.S. Senate.

Faced with intense criticism of its failings during the financial crisis, with the opposition Conservative Party calling for its head, the U.K.’s Financial Services Authority this week made a spectacular bid for survival.

Olusegun Aganga, who is based in London, heads Goldman’s hedge fund consulting services.

Financial industry lobbyists are pushing hard to water-down a bill that would bar banks from the hedge fund industry, even as the bill’s Republican opponents acknowledge that it will pass in some form.

Sen. Charles Schumer is threatening to block European alternative investment funds from marketing or raising money in the U.S. if the European Union adopts new regulations that have a similar effect on American funds in Europe.

If proponents of the European Union’s proposed hedge fund regulations hope a change in government in London will smooth the path, they are likely to be disappointed.

Direct taxes would be a bad idea in the Cayman Islands, domicile of approximately 80% of the world’s hedge funds, a blue-ribbon panel has said.

The U.K. really is “very isolated” in its opposition to the European Union’s proposed hedge fund rules: The country counts only a pair of Mediterranean island nations in trying to sink the directive, which would impose strict reporting and custody requirements on hedge funds and private equity funds.

The European Parliament will not be deterred by the British-backed delay in approving European Union hedge fund legislation, a top lawmaker said.

Germany may deploy its spies to gather information about hedge funds and other currency speculators, its finance minister said.