So, you have a hedge fund and you have the option to become registered with the SEC. This was all over the place last year, some funds volunteered, some did not, Some actually took action against the SEC citing that it violated privacy by having to disclose positions long and short and by doing so would give unfair advantage to competitors. I’m all for tapping Al Queda, but I would protect my positions to the end. As a former manager myself I would have fought this to my last dying breath. What I learned over the years, is that the government agencies in general are not your friend. Many players in the market(hedge funds), felt that by going the extra yard, ie full disclosure of all holdings, they would be viewed favorably by the SEC. By doing this, you open the door up to annual(sometimes unannounced spot audits). The SEC is always looking for someone to hang, but more importantly someone to make an example of. This article adds colour to my point.
By contrast, Steve Cohen at SAC Capital, the most successful fund on the planet, F bombed the SEC and is not registered. Who needs the headache?