Billion-dollar hedge fund stars face grilling

[Joanne98]

By Stephanie Kirchgaessner in Washington and Henny Sender in New York

Published: November 11 2008 20:18 | Last updated: November 11 2008 20:18

Hedge fund managers who earned more than $1bn last year, including George Soros and Philip Falcone, are being summoned to Capitol Hill on Thursday to testify under oath about the potential risks their firms pose to the broader economy.

The hearing before the House oversight committee, headed by Democrat Henry Waxman, marks one of the few instances in which the largely unregulated hedge fund industry will be subject to a barrage of questions by lawmakers.

Politicians are now seeking answers from the hedge fund managers, who appeared to have prospered as the financial crisis took its toll on the global economy.

Until now, in recent hearings devoted to AIG and Lehman, legislators have only heard from executives who oversaw corporate failures.

Mr Soros, an important donor to Democratic causes, and Mr Falcone will appear alongside John Paulson of Paulson & Co, James Simons of Renaissance Technologies and Kenneth Griffin of Citadel Investment Group.

The committee said the managers had co-operated with a long list of requests for documents, including e-mails detailing the level of risk associated with each hedge fund, the value of their positions in mortgage-backed securities, the likelihood of the fund’s collapse and the compensation and tax treatment of pay received by top managers.

The committee said, however, that it had not yet made a decision on whether it would release all the data it had been given publicly.

People familiar with the matter say the five hedge fund managers were chosen because they were the top earners, according to a calculation from Alpha Magazine, which every year publishes a list of the most highly compensated managers.

Hedge funds have been blamed for short selling the stocks of troubled financial firms and thus deepening their woes.

But their champions point out they are being unfairly penalised, as they are seen to represent the excesses of the market.

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http://www.ft.com/cms/s/0/93e6b78e-b028-11dd-a795-0000779fd18c.html

Waxman's committee Thursday on c-span

[Mike 03]

1. Thanks for the reminder! These hearings have been incredible, and I definitely don't want

to miss this one.

I sorta wish more people were following these. They are historic and so many of the questions that are asked in GD have been addressed in these hearings.