Activist Hedge funds play significant roles in Corporate Governance and contribute to corporate performance and management. They also create controversies due to conflict of interest and disclosure issues. I will examine the issues of activist hedge funds in corporate governance and analyze some cases, such as TCI -CSX, Mylan-King and AXA-MONY. Weather activist Hedge funds use equity derivatives and financial creation to exacerbate the problems. Then I will review the Securities Exchange Act and submit some propos als on possible amendments to FSC regulations based on my conclusion.