Shearman & Sterling partner Russell Sacks was quoted on possible restrictions on the sale of institutional transactions, including those in derivatives, in a June 2 Bloomberg wire story titled "Wall Street Sees Derivatives Sales Flaws After SEC Goldman Suit." The Bloomberg story noted that "while securities laws differentiate between the financial transactions companies can sell to individuals and to institutions, there's growing recognition that local governments and endowments shouldn't be equated with hedge funds." As a result, the story pointed out, firms are going to be more careful determining which institutions can undertake the detailed analysis required to understand investments.

Said Sacks, a member of the firm's Financial Institutions Advisory & Financial Regulatory practice in New York, "There are some very sophisticated and professional municipal and pension fund managers and some less sophisticated hedge-fund managers. At some point you run out of tests for sophistication, and you have to rely on the representations of the person in front of you, the qualifications of the person in front of you, and, as imperfect as it is, the assets under management of the person in front of you.''