Sadly it's easy to predict that, at least for legal and regulatory purposes, 2012 will look a lot like 2011 for the hedge fund industry: more laws; more rules; more regulators and more guidance. Most of it has understandably been spawned by the credit crisis but perhaps misdirected towards hedge funds, which still do not appear to have been a cause of the crisis, or to pose a systemic risk to the global financial markets. We should nonetheless spare a thought for the banks, which are being driven out of many businesses by their own regulatory onslaught.

One UK-based hedge fund collapse led to a decidedly mixed legal outcome in 2011. Weavering unwound in 2009 and appeared to be the most basic type of fraud: fictitious trades with related parties being grossly mispriced by the hedge fund manager. Nonetheless, the UK's Serious Fraud Office closed its investigation in September after finding there was "not a reasonable prospect of conviction". The civil trial continues with the judgement expected in early 2012.

At least the Cayman courts have already ruled on the Weavering matter, issuing a seminal judgement on the duties and obligations for Cayman fund directors while finding the Weavering directors liable for millions of dollars of losses (Weavering Macro Fixed Income Fund (In Liquidation) v Peterson and Ekstrom (Jones J, August 26, 2011). This case may state the obvious (such as directors must actually read and understand matters they approve) but the size of the judgement and the many factors examined make it a valuable precedent for the asset management industry.

The UK Bribery Act came into force in 2011. Although not primarily intended for financial services (think more military supplies and mining contracts), firms have had to consider its implications.

I will not try to re-examine the various twists and turns the AIFMD has taken in the labyrinthine EU process over the past few years. The final law was issued in July and Esma issued its final advice in the autumn. However, many aspects still remain open to ongoing consultation on rule-making and country-by-country implementation. Thanks to an unprecedented coalescing of trade groups, funds and lawyers, the result appears to be more workable than when the law was first proposed in 2009. For example, offshore funds may still be sold in the EU, fund manager operating requirements appear generally consistent with current best practice and the depositary rules are initially only applicable to on-shore funds.

Both Europe and the UK have new financial regulators for our industry: Esma in Europe and the FCA in the UK. Given the regulatory failure that appears to have been a factor in the financial crisis, it is easy to understand the political motivation behind the move. However, it is not clear if creating entirely new institutions and the loss of knowledge and experience that goes with that, such as the UK's dismantling of the FSA, will be the best way to regulate complex financial markets and firms.

In contrast, the US has tried to strengthen the SEC's powers. It has also reacted to the crisis with a slew of new regulations applicable to hedge funds and most large UK managers will be required to register with the SEC by the end of March. Perhaps the most challenging new regulation is the US Foreign Account Tax Compliance Act (Fatca). This requires funds to report information to the IRS identifying their US investors. Luckily, hedge funds are not alone in opposing the so-far unclear rules of Fatca and a global lobbying effort is under way prior to the current implementation date of 30 June 2013.

In Europe, the short-selling rules remain inconsistent, and it's hard to forget the night some were imposed without any warning. In 2012, expect regulators' pronouncements on AIFMD, the emerging UK FCA to assert itself, a prosecution under the Bribery Act and perhaps a serious fraud.