# kaal:claim:2348463-035

**Claim.** Increased disclosure obligations let so-called pilot fish emulate hedge funds' investment strategies and positions, which makes those positions more expensive to build and strips systematic bargaining strength from the negotiation process.

**Type.** mechanism  **Support.** argued

**Holds when.**

- markets where competitors can observe and copy disclosed positions
- illiquid distressed debt markets

**Source quote.**

> disclosure obligations, "pilot fish" can increasingly emulate investment strategies and positions. As a result, investment positions can become more expensive and systematic bargaining strength is removed from the negotiation process.

**From.** Wulf A. Kaal, *Hedge Funds’ Systemic Risk Disclosures in Bankruptcy* (2013), IV. SYSTEMIC RISK DISCLOSURES IN BANKRUPTCY, page 38

**Cite as.** Wulf A. Kaal, Hedge Funds’ Systemic Risk Disclosures in Bankruptcy (2013). SSRN: https://ssrn.com/abstract=2348463

**Verify.** sha256 of source PDF `b3682f24c0b277b3307fb9f54cd17a4e0a87b48eecba34b40e189212f20c9a22` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202013%20-%20Hedge%20Funds%E2%80%99%20Systemic%20Risk%20Disclosures%20in%20Bankruptcy.pdf

**Failure mode.** strategy replication through disclosure  (family: disclosure-cost-and-burden)

**Topics.** disclosure

**Keywords.** pilot-fish, strategy-replication, bargaining-power, disclosure-costs

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