Financial Times FT.com

Crackdown on hedge funds after Madoff affair

By Deborah Brewster and Joanna Chung in New York

Published: December 29 2008 19:46 | Last updated: December 29 2008 19:46

Hedge funds are bracing themselves for a raft of more stringent requirements by investors and increasing regulatory scrutiny, following the revelations this month that up to $50bn has been lost through alleged fraud by Bernard Madoff.

Half a dozen lawsuits have been filed by Madoff investors, mainly focusing on the failure of due diligence by the middlemen, such as hedge fund of funds, which channelled money to Madoff.

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