The SEC's 2004 hedge fund adviser registration rule failed in court because the agency lacked authority to define the term client, which the Investment Advisers Act had not otherwise defined, and the D.C. Circuit in Goldstein vacated the rule as arbitrary rulemaking.
Source quote, verbatim
Because the term "client" had not otherwise been defined in the Investment Advisers Act, the SEC had no authority to determine the meaning of the term.
From
Kaal and Oesterle, The History of Hedge Fund Regulation in the United States (2016), SEC Rules Requiring the Registration of Hedge Fund Managers, p. 9 https://ssrn.com/abstract=2714974 · source PDF
Cite as
Kaal and Oesterle, The History of Hedge Fund Regulation in the United States (2016). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2714974
Holds when
applies to rulemaking under the Investment Advisers Act of 1940
Classification
failuresupport: evidencedfailure: Undefined statutory term defeats agency rulemakingfamily: definitional-ambiguitydynamic-regulationsecurities-law
Related claims
restated_bykaal:claim:2998097-002 The 2004 registration rule failed in court because the term client was not defined in the Investment Advisers ...
restateskaal:claim:2150377-006 The SEC's 2004 attempt to reach hedge fund advisers failed as a matter of administrative law: in July 2006 the...
extended_bykaal:claim:2732915-008 After the D.C. Circuit vacated the SEC's 2004 hedge fund adviser registration rule in Goldstein v. SEC, the ov...
extended_bykaal:claim:2739479-002 The SEC's 2004 attempt to require hedge fund adviser registration failed: after the D.C. Circuit vacated the r...
Verify
The quote above is an exact substring of the source PDF, whose sha256 is 7764601d3ed5bb056b58949e8411eff9dfb9855f143719062030c980c5fa801b. Extraction method: pdf-text-layer. Attestation record: colloquium/attestations/fbf2ba06073bc9cf...json Verify the binding yourself: curl -s https://wulfkaal.github.io/claims/2714974-006.md | sha256sum