On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) into law, almost two years after the collapse of Lehman Brothers, which marked the beginning of a period of extreme stress and volatility in the global capital markets. The Dodd-Frank Act is comprehensive and affects almost all participants in our financial services and banking industries, including banks, depository institutions, holding companies, mortgage lenders, insurance companies, industrial loan companies, broker-dealers, investment advisers, hedge funds and other private investment funds, consumers and numerous federal agencies. Since the Dodd-Frank Act was passed, the Securities and Exchange Commission (the SEC) and various other agencies, including the Commodity Futures Trading Commission (the CFTC), the Federal Reserve Board (the Federal Reserve), and the Department of the Treasury, have been busy proposing rules to implement provisions of the Dodd-Frank Act. Meanwhile, private litigants and the SEC continue to sort through the aftermath of the financial disruption as evidenced by recent enforcement and private actions.
This Report provides an update since our last Hedge Fund Report in October 2010 and highlights recent developments, including the Dodd-Frank rulemaking, as well as recent civil and enforcement actions as they relate to the hedge fund industry. Paul Hastings attorneys are available to answer your questions on these and any other developments affecting hedge funds and their investors and advisers.