Q: Do you agree when people say hedge funds are lightly regulated?
Easterling: No. It's another myth. Hedge funds are required to comply with every rule, regulation, and law that affects virtually all investors in the financial markets. Then there are a variety of investor-related laws and regulations that impact who can invest with hedge funds. There are state and federal laws that require some managers to register as investment advisers—which adds additional regulations and requirements, including periodic examinations and filings.
~ Ed Easterling, "In Defense Of Hedge Funds," BusinessWeek, July 9 & 16, 2007