Regulators Probe Motive Behind Hedge Fund Sublets
January 8, 2007
Concerned that investment banks looking to curry trading and prime brokerage business with hedge funds are renting out office space to them at a discount, regulators are reportedly beginning to take a close look at so-called "hedge fund hotels."
Specifically, regulators are concerned that investment banks might be charging hedge funds higher trading fees, at investors' expense, in exchange for low rent.
Massachusetts Secretary of the Commonwealth William Galvin has subpoenaed UBS and is investigating other banks for this very reason.
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