Court Overturns SEC’s Enhanced Regulations for Private Equity and Hedge Funds

A federal appeals court has ruled that the Securities and Exchange Commission (SEC) overstepped its authority when it adopted enhanced regulations for hedge funds and private equity firms that industry groups denounced as regulatory overreach that would harm both fund managers and investors. The U.S. Fifth Circuit Court of Appeals struck down the SEC’s rules in a decision filed on June 5, justifying its decision on the premise that the SEC exceeded its statutory authority. “Because the promulgation of the Final Rule was unauthorized, no part of it can stand,” the judges wrote in the opinion. “Accordingly, we vacate the Final Rule.”...