On June 23, 2006, the US Court of Appeals for the District of Columbia Circuit struck down a US Securities and Exchange Commission (SEC) rule regulating hedge funds. The rule required hedge fund advisors responsible for at least $30 million in assets to register with the SEC, thus subjecting them to legal scrutiny for potential fraud. In a unanimous decision in Goldstein v. SEC, Judge Raymond Randolph wrote that hedge funds escape SEC regulation under the Investment Company Act of 1940 because "investment vehicles that remain private and available only to highly sophisticated private investors have historically been understood not to present the same dangers to public markets as more widely available public investment companies."



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