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Earlier quoted context omitted.
I'm completely out of the loop. Why?
It's a bit preposterous, no serious professional hold this kind of prejudiced view. Yahoo, McK, GS, FB, Uber, etc. might not hold the prestige it used to on your CV, but these things ebb and flow. Microsoft used to be "lame" but now it's cool again.
The New York Times has been running a whole series now on McKinsey with a new article about once a month or so highlighting example after example of alleged serious ethical lapses at the firm. Have things really gone downhill or do some journalists just have an ax to grind with McKinsey?
I talked with one ex-McKinsey person who went from a true believer to questioning recently, starting with when McKinsey held a corporate retreat a mile away from a Chinese internment camp https://www.businessinsider.com/mckinsey-china-uighur-corpor...
https://www.nytimes.com/2018/12/15/world/asia/mckinsey-china...
Seems highly unlikely that there’s any actual secretive insider trading happening here. It would be a HUGE risk for practically no gain, distributed across many individuals, committed by primarily people who wouldn’t stand to benefit. The firm should probably switch to vanguard or whatever... but the existence of this hedge fund does not mean the firm is using its insider knowledge maliciously. Most consultants won’t…
I feel that you may underestimate the amount of insider trading that goes on in private equity. Remember also, the line between insider knowledge being legal or not is somewhat gray. I doubt there is an on record scheme with company memos and other communication discussing inside info. It's probably much closer to work friendships and casual partnerships that pass much of this information along. As long as you can bu…
I highly doubt that there’s any impropriety going on besides the lack of disclosure. Investment banks have been dealing with conflicts like this for a long time and the market has never cared.
> A Chinese wall is an ethical barrier that prevents communication between members of an organization that might lead to conflicts of interest. For example, a Chinese wall could exist between departments where the exchange of information could unfairly influence trades. The "wall" is figuratively erected to safeguard insider information and protect private data that could create negative implications and legal consequences if improperly shared.
BREAKING DOWN Chinese Wall > Protecting client data and confidential information is critical to any business but is especially important to companies with diversified services, such as insurance companies, banks, and other financial services firms.
> The Gramm-Leach-Bliley Act (GLBA) of 1999 repealed the Glass-Steagall Act that prohibited banks, insurance companies, and financial services companies from acting as combined firms, such as banks offering insurance products. The Gramm-Leach-Bliley Act resulted in a surge of mergers and increased diversification of services, as well as an increase in fears and public scrutiny. One concern was the protection and sharing of confidential information and personal consumer data with those of contrary interests. In response to growing concerns, many companies adopted the Chinese Wall concept.
From Matt Levine of Bloomberg: Here is a New York Times story about the “McKinsey Investment Office, or MIO Partners,” the in-house hedge fund of consulting firm McKinsey & Co., which invests employee money, including in companies that McKinsey advises. “That web of relationships underscores the unusual nature of McKinsey’s hedge fund, and the potential for undisclosed conflicts of interest between the fund’s investm…
I don’t see how McKinsey would not be an “access person” held to the same insider restrictions as their client company’s executives.
Either way this snippet from Bloomberg seems to completely miss the point.
From Matt Levine of Bloomberg: Here is a New York Times story about the “McKinsey Investment Office, or MIO Partners,” the in-house hedge fund of consulting firm McKinsey & Co., which invests employee money, including in companies that McKinsey advises. “That web of relationships underscores the unusual nature of McKinsey’s hedge fund, and the potential for undisclosed conflicts of interest between the fund’s investm…
You are an adviser? Good. Here's your consulting fee and that should do it.
This is a non-issue.
The New York Times has been running a whole series now on McKinsey with a new article about once a month or so highlighting example after example of alleged serious ethical lapses at the firm. Have things really gone downhill or do some journalists just have an ax to grind with McKinsey?
Isn't that normal? How strange would it be for me to tell my friends "this stock is going to skyrocket, buy some!" without owning any myself? Anything otherwise would come across as extremely disingenuous. This is a non-issue.