# kaal:claim:2714974-006

**Claim.** 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.

**Type.** failure  **Support.** evidenced

**Holds when.**

- applies to rulemaking under the Investment Advisers Act of 1940

**Source quote.**

> 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, page 9

**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

**Verify.** sha256 of source PDF `7764601d3ed5bb056b58949e8411eff9dfb9855f143719062030c980c5fa801b` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Oesterle%20-%202016%20-%20The%20History%20of%20Hedge%20Fund%20Regulation%20in%20the%20United%20States.pdf

**Failure mode.** Undefined statutory term defeats agency rulemaking  (family: definitional-ambiguity)

**Topics.** dynamic-regulation, securities-law

**Keywords.** goldstein, rulemaking, registration, judicial-review, sec-authority

**Related claims.**

- restated_by: https://wulfkaal.github.io/claims/2998097-002
- restates: https://wulfkaal.github.io/claims/2150377-006
- extended_by: https://wulfkaal.github.io/claims/2732915-008
- extended_by: https://wulfkaal.github.io/claims/2739479-002

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.