Monday, October 16, 2006

As Lenders With Easy Access, Hedge Funds Draw Insider Scrutiny

Hedge funds have crashed the once-clubby world of corporate lending in a big way, and the increased presence of these lightly regulated funds is raising some concerns, especially as relates to the use of inside information. In at least one case, regulators are taking note. The Securities and Exchange Commission is looking into whether hedge funds who were lenders to Movie Gallery took their inside knowledge of the company's recent struggles and traded on it.

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