Regulation

From New York to London to Sydney, Australia, hedge funds are unhappy with new short-selling restrictions.

The worldwide market turmoil has one world leader saying, “I told you so.”

In a desperate effort to shore up the finance industry, the U.S. Securities and Exchange Commission has barred outright short-selling in nearly 800 financial stocks.

The emergency order, which expires in 10 days but can be extended for up to 30, covers the shares of 799 financial services firms. In addition to the short-selling ban, which is effective immediately, the SEC rolled out a series of other measures designed to curb short-selling, including new disclosure requirements.

The Securities and Exchange Commission yesterday took new steps to restrict short-selling, and its chairman said that it is mulling new disclosure requirements for hedge funds.

Britain’s third party is continuing its populist assault on hedge funds.

A pair of hedge funds seeking to recoup their losses from Argentina’s default on its debt six years ago has convinced a judge to freeze some US$70 million in an Argentine state-owned bank.

Growing hedge fund unrest about British tax policy is not stopping the leader of that country’s third political party from promising to end the “grotesque spectacle” of hedge fund managers coughing up less than blue-collar workers.

The controversial restrictions on short-selling imposed by U.S. regulators this summer are unlikely to be expanded to all stocks or made permanent when a new rule is promulgated.

A U.S. Senate committee probe has found that several major Wall Street firms helped offshore hedge funds dodge millions in U.S. taxes with complex derivative and stock-loan transactions.

With its Byzantine tax structure and complicated federal bureaucracy, Switzerland has been unable to compete as a hedge fund center.