Monday, October 29, 2007

Foreign funds raise concern: SEC chief

by Marcy Gordon from Business Week

Countries with sovereign wealth funds invited to a G-7 "outreach dinner" last Friday in Washington were: China, Korea, Kuwait, Norway, Russia, Saudi Arabia, Singapore and the United Arab Emirates ... The Abu Dhabi fund recently bought 7.5% of the management operations of the U.S. private-equity firm, Carlyle Group. SEC Chairman Christopher Cox said the rise of sovereign wealth funds, along with that of government-owned companies that are publicly traded, "call into question the adequacy of our enforcement and regulatory regime." There is an "inherent conflict of interest that arises when government is both the regulator and the regulated," he said, and the opportunity for political corruption increases when individuals with government authority also possess massive commercial power.

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