From Trust and Delegation by Stephen Brown, William Goetzmann, Bing Liang, Christopher Schwarz First Draft: June 16, 2009
"An event study shows that the DD reports are typically issued on high return funds three months after the historical performance has peaked. The DD reports are also issued at the point of highest investor flow into the fund. This pattern is consistent with return chasing behavior by institutional hedge fund investors. Brown et al. (2008) found no evidence that knowledge of operational risk in any way mediated the fund flow performance relation."
Would that be an investor behavior impervious to the most draconian regulation?
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