"It is time to get serious about hedge fund risk. This, however, is not the usual argument for more regulation of hedge funds. Here is a contrarian view: the best course for our capital markets may actually be in the other direction. Perhaps hedge funds need to be deregulated, breaking down the wall that restricts hedge fund investing only to the wealthy.
All investors — not just rich ones — should have access to the superior investing and diversification potential of hedge funds. Deregulating these opaque entities will also bring these funds out into the open, helping regulators monitor systemic risk, where the real focus of hedge fund supervision should be"
For more on this, see this post from back in February.