# kaal:claim:2715083-011

**Claim.** Private party litigation against hedge fund managers stays minimal because well counseled managers make extensive disclosures to investors who are presumed sophisticated, unlike mutual fund advisers who face ongoing high value investor suits.

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

**Holds when.**

- U.S. hedge funds and offshore vehicles chartered in the Caymans or BVI
- assumes industry standard disclosure practice

**Source quote.**

> By contrast, private-party litigation involving hedge fund managers is minimal because of the extent and nature of the disclosures well-counseled hedge fund managers provide to their investors

**From.** Kaal, *Confluence of Mutual and Private Funds* (2016), III. Persistent Differences and Nominal Confluence, page 9

**Cite as.** Kaal, Confluence of Mutual and Private Funds (2016). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2715083

**Verify.** sha256 of source PDF `b5c92186260d4a8499a14f81ee24ace093b24e7740af3effcd1c526fa4fa221e` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202016%20-%20Confluence%20of%20Mutual%20and%20Private%20Funds.pdf

**Topics.** law-and-legal-systems, risk-and-incentives, disclosure, compliance

**Keywords.** litigation-risk, disclosure, investor-protection, enforcement-asymmetry

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