News Release

Washington DC - Idaho Senator Mike Crapo, a member of the Senate Banking Committee, strongly supports a court decision to invalidate the controversial Security and Exchange Commission (SEC) hedge fund rule. The U.S. Court of Appeals for the D.C. Circuit today vacated and remanded the SEC hedge fund rule requiring registration by advisers to unregistered hedge funds that passed the SEC Commission 3-2 on October 26, 2004. Shortly after the rule was adopted, litigation was brought against the SEC challenging the agency’s authority to issue the rule.

“I agree with the Court that the SEC rule is arbitrary, a significant departure from the current regulatory framework, and lacks statutory authority. I am glad that the Court affirmed the concerns of many of us in Congress that the SEC never adequately explained the basis for its dramatic re-interpretation of its statute,” Crapo said.

“While the SEC is an independent agency, it does not have – nor should it have – the authority to make law where Congress never intended. Further, it must not be encouraged to issue regulations that are beyond its authority. There is ample work for the Commission to do within the confines of its jurisdiction and I hope that it will now focus on the enforcement and implementation of those statutes and that it will also utilize its resources responsibly,” he concluded.

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