Addressing Inept SEC Enforcement Efforts: Lessons from Madoff, the Hedge Fund Industry, and Title IV of the Dodd-Frank Act for U.S. and Global Financial Systems
Abstract
A global regulatory framework for hedge fund custodians is needed, in addition to Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act or Dodd-Frank), to reduce the risk of the occurrence of another Madoff fraud and to assess systemic risk posed by hedge fund activities in the global financial system. This article recommends the creation of a single global regulator for independent, qualified hedge fund custodians to which country regulators must submit sufficient information to protect investors and to assess the level of systemic risk posed by hedge fund activities in the global financial system. The implementation of the global regulatory framework governing hedge fund custodians recommended in this article likely would have detected, and perhaps reduced the scale of, the Madoff fraud and facilitated assessment of systemic risk posed by hedge fund activities in the global financial system.
Recommended Citation
Cheryl Nichols,
Addressing Inept SEC Enforcement Efforts: Lessons from Madoff, the Hedge Fund Industry, and Title IV of the Dodd-Frank Act for U.S. and Global Financial Systems,
31
Nw. J. Int'l L. & Bus.
637
(2011).
https://scholarlycommons.law.northwestern.edu/njilb/vol31/iss3/20
