Nov 12 Hedge fund managers who earned more than
$1 billion last year, including George Soros and Philip
Falcone, are being summoned to Capitol Hill on Thursday to
testify under oath about potential risks their firms pose to
the broader economy, the Financial Times said.
The hearing before the House oversight committee will be
headed by Democrat Henry Waxman, the paper said.
Soros and Falcone will appear alongside John Paulson of
Paulson & Co, James Simons of Renaissance Technologies Corp and
Kenneth Griffin of Citadel Investment Group, the paper said.
The five hedge fund managers were chosen because they were
the top earners, according to a rough calculation from Alpha
magazine, the FT said, citing people familiar with the matter.
The fund managers could not be immediately reached for
comment by Reuters.
Hedge fund executives expect the hearing will focus on
questions including whether hedge funds have become so large
that they threaten the stability of the financial system,
either because of the impact of their trading or because of the
impact of the failure of even one big hedge fund, the FT said.
A subsidiary question in this regard is whether hedge fund
compensation practices encourage reckless risk taking,
according to the paper.
Alpha publishes a list of the most highly compensated
managers and executives ever year, the paper said adding that
many dispute the accuracy of the figures.
Another issue expected to be discussed will be short
selling, the paper said.
Hedge fund managers and consultants told the FT the
hearings may be a prelude to stiffer regulations.
The paper said the committee said the managers had
co-operated with a long list of requests for documents.
Documents requested included 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, according to the paper.
The committee made clear it had not yet reached a decision
on whether it would release all the data it had been given
publicly, the paper said.
(Reporting by Ajay Kamalakaran in Bangalore; Editing by