The trend in the '90s, under Clinton, was towards removal of the burdensome regulations on the financial industry which were a legacy of the Great Depression, thus allowing the industry to be more efficient. And things are presumably even more efficient than that in the rarefied air of the hedge fund sector, in which rich people hand their money over to managers who handle it with little or no regulation at all.

In that arena, investors have complete freedom to make their own choices, without any nanny state regulators to interfere. After all, they're investing their own funds, and of course they'll do so with care. What are the odds that they'd give that money to managers whose fund would go bad, or disappear, or fall off the face of the earth?