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Soros, Falcone Defend Hedge Funds at House Hearing

Hedge-fund managers including George Soros and Philip Falcone, in an unprecedented appearance before Congress, defended their practices and profits while splitting over whether the U.S. should impose stricter regulations.“This is not a case where management takes huge bonuses or stock options while the company is failing,” said Falcone, one of five billionaire investors who testified today before the House Committee on Oversight and Government Reform in Washington.

Falcone, senior managing director of New York-based Harbinger Capital Partners, urged Congress to require more disclosure by hedge funds, which oversee $1.7 trillion of investments. Soros, founder of Soros Fund Management LLC, cautioned against “ill-considered” rules because this industry is reeling from market losses and client defections.

“We do not need greater regulation of hedge funds,” said Kenneth Griffin, founder of Citadel Investment Group LLC in Chicago. “We’ve not seen hedge funds as a focal point of the carnage.”

The hearing was called by committee Chairman Henry Waxman, whose panel doesn’t have jurisdiction over securities-industry legislation. Even so, his interest suggests the industry faces increased scrutiny and regulation next year after President- elect Barack Obama takes office.

read the rest published by Bloomberg here:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=azZGwY05SZ9M