With the arrest of 13 additional individuals and entities in the Galleon case, we urgently see the need for hedge fund compliance to beef up in two areas:
OPERATIONAL RISK CONTOLS- Hedge Funds need to understand and monitor where and how the information being traded on is generated.
TRAINING - Employees need to understand precisely what [...]
Q: If hedge fund compliance professionals could roll back time and make one form of technology disappear, what would it be?
A: Clearly, without question, hands down: email (and its cousin, instant messages)
No matter how many warnings and explanations are given, the spate of wacky, stupid and worst of all, self-implicating, emails and IM’s by hedge fund [...]
For hedge fund compliance professionals, a primary part of their job responsibility is to prevent or detect front-running.
In the hedge fund context, front-running is generally defined as a manager or employee taking a position in an equity security prior to the fund, or filling an order for their own account prior to the fund’s. [...]
Richard Ketchum CNBC Interview 8/13/08 In a landmark agreement announced today, the NY Stock Exchangeand FINRA have taken responsibility for the monitoring of insider trading for ten US exchanges. NYSE and NYSE-Arca listed securities trading will now be monitored by NYSE, and AMEX and NASDAQ-listed securities trading will be overseen by FINRA.
This brings surveillance, investigation [...]
Last week’s indictment by federal prosecutors of an Ernst & Young partner for “tipping” in an insider trading scheme highlights the need for training of hedge fund employees about a very critical, but often over-looked, component of these cases — namely, that a person can be subject to criminal charges for “tipping” regardless of whether [...]
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