From this perspective, regulatory bias is a natural human manifestation of the current institutional structure of financial regulation in which the financial services industry enjoys a decisive home-field advantage.
By accepting money from limited numbers of very rich individuals or institutional investors, and (in many cases) by basing themselves in places where regulation is lax, hedge funds escape the standard reporting requirements faced by mutual funds.
The rule, Regulation Fair Disclosure, was adopted in 2000 to address a leg-up some institutional investors were getting via information about public companies that was not available to all investors.
Traditionally, issuers complied with Regulation FD (which was intended to prevent issuers from selectively disclosing important information to securities analysts and institutional investors before it was made known to the general public) by disseminating press releases that simultaneously were filed with the SEC.