Sovereign Wealth Fund Liability - Private Investors Left Out in the Cold
49 Pages Posted: 15 Jan 2011
Date Written: October 1, 2010
Sovereign wealth funds have exploded in numbers, assets and clout in recent years. This accession has sparked a debate as to the political and economic status of these funds. However, this attention has not focused on sovereign wealth funds' liabilities. Specifically, there exist a myriad of issues surrounding recovery.
In the United States hedge funds, corporations, and other major players have contractually agreed on liability issues. Individuals, however, do not have the same protections and face hurdles damaging recovery chances. Both public and international safeguards seem adequate and point towards arbitration.
This paper argues, therefore, that the United States should adopt an approach to protect investors' rights and confidence in the market. Specifically, the United States should amend the Foreign Sovereign Immunities Act to address recovery problems.
Keywords: Sovereign Wealth Funds, IMF, Santiago Principles, Foreign Sovereign Immunity, Foreign Sovereign Immunities Act, Market, Transparency, General Agreement on Trades in Services
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