A hedge fund is a form of investing that is private and involves intelligent investors. The backgroundHedge funds can be very profitable when they are running smoothly. When they begin to fail, assets can dwindle at a rapid rate. A hedge fund fails for different reasons including, problems with cash flow, and lack of returns. Hedge funds also experience losses and penalties.
Hedge funds are also investigated by the Federal Bureau of Investigation, which has tackled many different famous casesMore importantly, it depicts the need for more federal regulation. Hedge funds account for up to fifty percent of daily stock exchanges on the New York Stock Exchange. Hedge funds cover a significant amount of the economy. This makes it very dangerous for the economy to not regulate hedge funds. Automatically, hedge funds are carrying an investment risk of some sort. It is the job of the investor to research the company and weigh the risks against possible profits.Performing a due diligence and filing complaints are also ways to combat fraud.