kaal:claim:1428387-033

Mandatory risk disclosure to the SEC would probably fail on staffing grounds, because professionals capable of understanding hedge fund risk data would be disincentivized to use that knowledge for supervision rather than economic gain, finding the private sector far more lucrative.

Source quote, verbatim

Professionals who could understand the risk data would probably be disincentivized to use their knowledge for purposes of supervision rather than economic gain. Knowledgeable risk analysts may find the private sector much more lucrative than the public sector.

From

Kaal, Hedge Fund Valuation Retailization, Regulation, and Investor Suitability (2009), VI.C Valuation and Risk Disclosure, p. 50
https://ssrn.com/abstract=1428387 · source PDF

Cite as

Kaal, Hedge Fund Valuation Retailization, Regulation, and Investor Suitability (2009). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1428387

Holds when

where the regulator must interpret data on hard-to-value assets and complex instruments

Classification

failuresupport: arguedfailure: regulator-staffing-gapfamily: supervisory-capacity-gapsecurities-lawdisclosurerisk-and-incentives

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