Appeals court invalidates hedge fund regulation

In a setback for the Securities and Exchange Commission, a U.S. appeals court threw out Friday an agency rule that had subjected the $1.1 trillion hedge fund industry to stricter regulation and random inspections.

The court said the rule, which took effect Feb. 1, was arbitrary because it exempted hedge funds with fewer than 15 clients. 

"The number of investors in a hedge fund - the 'clients,' according to the commission's rule - reveals nothing about the scale or scope of the fund's activities," said the U.S. Appeals Court for the District of Columbia.

See the full story here in The International Herald Tribune.