It's been hard to turn around over the past week without walking into a hedge fund story, and most of the headlines suggest greater accountability may soon be required of Wall Street's cowboys.

A federal appeals court ruled last Friday that the SEC's attempts at regulating hedge funds need more work. Days later, the Senate Judiciary Committee heard pointed testimonies on hedge funds, including a written statement from former SEC lawyer Gary Aguirre, reported Reuters.

Wrote Aguirre -- who has separately written to Banking Committee Senators Chuck Hagel and Christopher Dodd about his firing from the SEC after he tried to go after a hedge fund -- "Powerful interests want the SEC to stay just the way it is ... They include the financial industries that are receiving tens of billions of dollars in revenues for helping hedge funds cheat other market participants or close their eyes to the carnage."

Connecticut's attorney general, Richard Blumenthal, told the committee that Congress should act quickly in the wake of the court's decision, as the industry's "regulatory black hole" needs urgent remedy. His cries had barely reached the Capitol's rafters when House Democrats announced they would unveil a bill by Thursday. As good as their word, Reps. Barney Frank and Mike Capuano of Massachusetts, along with Paul Kanjorski of Pennsylvania, made a stab towards amending the '40 Act with their "Securities and Exchange Commission Authority Restoration Act of 2006." More again from Reuters.

With felicitous timing, Morningstar has also jumped into the hedge tracking game, saying Thursday that new hedge fund data on its Web site will add transparency to the industry. This development came just as Standard and Poor's announced, reported Reuters, that it would discontinue its S&P Hedge Fund Index following the collapse of PlusFunds Group, its supplier of data for that index.

Judiciary panel Republicans sounded ready to reign in hedge funds if necessary. "Hedge funds are too big and too powerful ... not to have some oversight," said Pennsylvania's Arlen Specter, committee chairman. Utah's Orin Hatch, while saying he was "not necessarily calling for new regulations," admitted, "we need to monitor this field ... Hedge funds are the wild west of our financial markets."  

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