Hedge fund bigs have a date with the House Committee on Oversight and Government Reform on Thursday

Harbinger's Phil Falcone, Citadel's Ken Griffin, Paulson & Co's John Paulson, RenTech's Jim Simons and George Soros have a date with congress on Thursday, as they become the latest group on the hot seat to face what's likely to be some hostile questions. 

For these executives, who have been tapped to speak for the industry, it probably won't be an entirely pleasant experience. "We've been under fire for a while," said Richard Baker, head of the U.S. hedge-fund industry's biggest lobbying group, the Managed Funds Association, in Washington. The firms represented at this week's hearing belong to the association.

"Hedge funds are a fairly easy political target. They're looked upon as high-net-worth people doing things we don't necessarily understand," Mr. Baker said. Most hedge funds are suffering along with other investors, though the funds' average declines haven't been as steep as those of the major market indexes.

Already, momentum is building to monitor hedge-fund activities more closely and curtail some trading activities, through greater regulatory oversight and lower borrowing limits, industry insiders said. Recently, hedge-fund managers lost loopholes in the federal tax law that allowed them to postpone for years paying taxes on certain profits. At the same time, hedge funds were crippled in September by temporary limits on their ability to bet against hundreds of financial stocks, or short selling, in what was seen as an ineffective effort to protect those stocks from declines.

Hedge Funds on Hot Seat - Wall Street Journal