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Statement of Chairman Cox Concerning the Decision of the U.S. Court of Appeals in Phillip Goldstein, et al. v. Securities and Exchange Commission


Washington, D.C., June 23, 2006 - SEC Chairman Christopher Cox today made the following statement:

"The SEC takes seriously its responsibility to make rules in accordance with our governing laws. The court's finding, that despite the Commission's investor protection objective its rule is arbitrary and in violation of law, requires that going forward we reevaluate the agency's approach to hedge fund activity. I have instructed the SEC's professional staff to promptly evaluate the court's decision, and to provide to the Commission a set of alternatives for our consideration. The SEC will use the court's decision as a spur to improvement in both our rulemaking process and the effectiveness of our programs to protect investors, maintain fair and orderly markets, and promote capital formation. And we will continue to work with the other members of the President's Working Group on Financial Markets, including the Treasury, the CFTC, and the Federal Reserve, to evaluate both the systemic market risks and retail investment issues associated with the growing presence of hedge funds in the world's capital markets."

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Modified: 07/13/2006