hedge fund firing for having a paper account/PA
intern at a small <1 bil AUM hedge fund, not as a junior SA or anything. fresh/soph. today boss said that he will probably have to fire me for paper account and PA trading activity in an asset class totally unrelated to the HF far before the internship even started. am I getting cheesed? I feel like I have friends who go work at HFs, even trade the same asset classes/even individual names before starting, and are fine/not a compliance issue.
feeling very bummed if this is on the table because I was interviewing for objectively better funds but went with this because I like the guy, and will likely have no xp now. damn. just curious if im getting screwed/this guy has ulterior motives. I'm fine with disclosing my PA trading activity, but I'm worried because my parents have a significantly large trust that is in a few investment vehicles, and I don't trust randoms looking through this especially when really only my parents know of this.
I am worried because I would now have no internship if this falls through, but there are some red flags here for sure.
Based on previous WSO threads, here are some key points to consider regarding your situation:
Compliance Issues: Hedge funds often have strict compliance rules regarding personal trading accounts (PAs) to avoid conflicts of interest and insider trading. Even if the asset class is unrelated, the firm may have policies that prohibit any form of personal trading to maintain a clean compliance record.
Disclosure Requirements: Many hedge funds require full disclosure of personal trading activities and accounts. This is to ensure that there are no potential conflicts of interest or compliance breaches. If you haven't disclosed your PA trading activity, this could be a significant issue.
Trust and Transparency: Your concern about disclosing your parents' trust and other investment vehicles is valid. However, transparency is crucial in the finance industry, especially in roles involving sensitive financial information. You might want to discuss with your parents and seek legal advice on how to handle this disclosure appropriately.
Red Flags and Ulterior Motives: If you feel that the firing is unjustified or that there are ulterior motives, it might be worth having a candid conversation with your boss. Express your willingness to comply with all necessary disclosures and understand the specific reasons behind the decision.
Future Opportunities: If this internship falls through, it’s important to stay positive and proactive. Continue networking and applying to other funds. Highlight your willingness to comply with compliance requirements in future interviews to avoid similar issues.
Learning Experience: Use this experience as a learning opportunity. Understanding the importance of compliance and transparency in the finance industry will be beneficial for your future career.
If you need more specific advice or have further questions, feel free to ask!
Sources: A friend of mine cheated and got an Internship offer at a BB IB, A friend of mine cheated and got an Internship offer at a BB IB, No PE in my PA, HF -> MF PE
Typically there are clear rules and each firm has different rules.
You mentioned before the internship started, please be specific, did you sign that you had to declare / clear trades and you did not?
Some funds prohibit employees to trade at all, other known ones allow employees to trade same asset class (“it’s liquid enough”) which I find a bit too extreme as well. In my company you have many rules to follow, including pre clearing and reporting at quarter end. People risk substantial pay cut of the yearly total comp if rules are not followed with risk of being laid off if it happens twice.
A paper account is not a PA. Very confusing post
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