Hedge Lobby Snaps Back at Mutual Fund Group

The head of the main lobbying group for the hedge fund industry has essentially told his mutual fund counterpart to mind his own business following the latter's speech that "predatory trading strategies" by hedge funds have victimized mutual fund investors.

The spat between lobbyists underscores the degree to which increased Securities and Exchange Commission scrutiny is affecting both the $7 trillion mutual fund industry, which has seen its reputation take a pounding since the revelation of late-trading and market-timing abuses last fall, and the trillion-dollar hedge fund industry, which wants to ward off increased regulation by the government watchdog.

Jack Gaine, president of the Managed Funds Association, the main hedge fund lobbying group, said he was disappointed by remarks made Tuesday by Paul Schott Stevens, the new president of the Investment Company Institute. He took particular issue with a comment that hedge funds used market-timing strategies "to pick the pockets of long-term mutual fund investors." ...