Two weeks ago I wrote about what the Securities and Exchange Commission was doing to regulate the mutual fund industry to help the small investor, the poor folks. It really added up to zero.

Now the SEC is going to make new regulations for hedge funds to protect the rich folks. And it is more window dressing. In fact, it looks downright stupid. When I say rich folks it is because in order to qualify to invest in a hedge fund you must have assets of one million dollars and income of $200,000 per year for a single person and $300,000 for a couple. With this kind of money you can hire an attorney or financial expert to read the hedge fund document. Furthermore, the major investors in hedge funds are not little investors, but pension plans, endowments and universities that are supposed to be administered by professionals.

The SEC says they want to put in regulations to help prevent fraud. Hey, you guys, what about all the fraud you did NOT find in the regular mutual fund industry? They missed multimillions of fraud in standard poor folks mutual funds and now they want regulations to protect the rich folks. All this will do is create more useless expensive jobs in Washington. Every time you hire a new government worker it is the same as putting more tax on everyone, rich and poor.

The Senate Banking Committee voted it in by a 3 to 2 committee decision. Three Democrats for and 2 Republicans against. It is the usual liberal Democrat who wants feel good legislation that does no good, but tells the public we care. Such expensive nonsense.

And how are they going to put this new regulation into effect? More paperwork without question. The funds would be required to hire a Compliance Officer who would write out a set of trading procedures and a code of ethics. Because I have owned a regulated brokerage company I can tell you this is a pile of BS. The new compliance officer is paid by management. He is a toothless tiger. And the SEC will come to do an on-site audit every 2 to 5 years. Because my company was in Florida they did not show up until January or February.

What is most interesting is that there were only 46 hedge fund fraud cases during the past 5 years involving about one billion dollar. In an industry with more than $800 billion in assets this is a spit. Let the rich folks sue and dont burden us poor taxpayers.

This new regulation means nothing and is merely a first step for more stringent rules to follow. It is another additional cost of doing business and adds to our taxes.