New rules could see hedge funds sued for ‘doing a good job’

SEC proposal would make it easier for investors to sue hedge funds than mutual funds for negligence


New rules proposed by US regulators would remove hedge funds’ ability to protect themselves against negligence lawsuits, leaving them liable for mistakes as simple as fat-finger trades or losing money in a falling market.

The Securities and Exchange Commission wants to strip hedge fund contracts of a routine clause that shields fund managers from claims that they behaved carelessly. If the SEC introduces the rule as it stands, hedge funds – the biggest risk-takers in financial markets – would

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to View our subscription options


Want to know what’s included in our free membership? Click here

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here