One tiny paragraph that is a proposed Connecticut hedge fund disclosure bill created a big commotion among hedgies in the Nutmeg State, but in the end it didn't get far. Seemingly inspired by the Bayou Group fiasco of '05 and calls from state Attorney General Richard Blumenthal for greater disclosure, State Rep. John Stripp introduced a measure that would require, among other things, Connecticut-based HF managers to hand over financial information, such as portfolio holdings, to funds of hedge funds and institutional investors, Securities Industry News reports. The bill met with "a great deal of resistance," Stripp told SIN. "The cost this legislation imposes far outweighs any conceived benefits," Robert Clark, general counsel for the Managed Funds Association, said at a recent hearing. Clark also said the legislation "would encourage hedge funds to simply leave the state" – a big deal in Connecticut, which is home to about 20% of the 80 largest hedge funds in the country. What's more, hedge funds are a main source of economic growth in the state, the Hartford Courant reports. .

Well, that uproar was enough to squash the bill, and over the weekend, a new proposal was set on the table, one that so far has generated little objection – a new unit in the Connecticut Department of Banking whose mission would be to stamp out hedge fund fraud.