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SF Mutual Fund Exec Front-Ran His Fund's Trades

propublica.org

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Re: SF Mutual Fund Exec Front-Ran His Fund's Trades

#11

Post by jarsin »

cj wrote: post #3

I have a Wealthfront account with quite a bit of money in it, and I deposit over 50% of my paycheck every week. I sometimes look at how they’re investing the money on deposit. They often buy the same ticker at (radically) different prices. The honest excuse is they spread the purchase throughout the day or at different times in the day. But I’ve always had this suspicion that they might be doing something to boost th…

Just CTRL-F for Citadel in any of their agreements.

Guaranteed someone is paying to front run for them.

Re: SF Mutual Fund Exec Front-Ran His Fund's Trades

#12

Post by hongspike »

twoodfin wrote: post #9

The hn title claims more certainty than the article does. An equally plausible version of this story is that a very rich fund exec came to the personal conclusion that VMware was a great buy & bought, then had some part in convincing his firm of same, because that kind of judgment is what he’s there for. None of that is illegal. As the article makes clear, it’s only front-running if the employee has reason to believe…

The chief investment officer has ultimate decision making power to approve or reject trades. If he wanted his firm to invest in VMWare, it was going to happen.

Re: SF Mutual Fund Exec Front-Ran His Fund's Trades

#13

Post by rexer »

hongspike wrote: post #12
twoodfin wrote: post #9

The hn title claims more certainty than the article does. An equally plausible version of this story is that a very rich fund exec came to the personal conclusion that VMware was a great buy & bought, then had some part in convincing his firm of same, because that kind of judgment is what he’s there for. None of that is illegal. As the article makes clear, it’s only front-running if the employee has reason to believe…

The chief investment officer has ultimate decision making power to approve or reject trades. If he wanted his firm to invest in VMWare, it was going to happen.

The stock purchase occurred in 2015. Hoeft wasn't CIO until 2021 it seems:

https://www.dodgeandcox.com/financial-professional/us/en/new...

Re: SF Mutual Fund Exec Front-Ran His Fund's Trades

#14

Post by blackeyeblitzar »

hongspike wrote: post #12
twoodfin wrote: post #9

The hn title claims more certainty than the article does. An equally plausible version of this story is that a very rich fund exec came to the personal conclusion that VMware was a great buy & bought, then had some part in convincing his firm of same, because that kind of judgment is what he’s there for. None of that is illegal. As the article makes clear, it’s only front-running if the employee has reason to believe…

The chief investment officer has ultimate decision making power to approve or reject trades. If he wanted his firm to invest in VMWare, it was going to happen.

He also does not have ultimate decision making power. The article notes that all decisions by their investment committee were a group vote.

Re: SF Mutual Fund Exec Front-Ran His Fund's Trades

#15

Post by ChainOfFools »

jarsin wrote: post #11
cj wrote: post #3

I have a Wealthfront account with quite a bit of money in it, and I deposit over 50% of my paycheck every week. I sometimes look at how they’re investing the money on deposit. They often buy the same ticker at (radically) different prices. The honest excuse is they spread the purchase throughout the day or at different times in the day. But I’ve always had this suspicion that they might be doing something to boost th…

Just CTRL-F for Citadel in any of their agreements. Guaranteed someone is paying to front run for them.

I have a family acquaintance who works at a fairly prominent hft shop in nyc. He's rather circumspect when I ask him about details of his job, which doesn't directly relate to trading but I get the impression he has to know quite a bit about how the various trade plans work, since he is deeply involved in maintaining the highly bespoke infra they run on.

After a few beers he'll sometimes start bringing up "customers purchasing order flow" from them, which apparently accounts for a significant part of their revenue. He's also indicated that this is not a practice unique to their shop but is fairly commonplace among companies that have highly advantageous (next-building or same-floor/dc equivalent latency) transport to various exchanges.

I assume, but am hesitant to ask directly, that this activity cannot actually be what it sounds like, but now I don't know.

Re: SF Mutual Fund Exec Front-Ran His Fund's Trades

#16

Post by piva00 »

blackeyeblitzar wrote: post #6

> But a massive assemblage of confidential stock trading data obtained by ProPublica reveals that the practice may be continuing on a notable scale. So is my understanding correct that ProPublica has someone’s private financial information that was illegally released to them? I understand that there may be something illegal or unethical here, but I find it weird that organizations like ProPublica or others are given…

> I understand that there may be something illegal or unethical here, but I find it weird that organizations like ProPublica or others are given a pass for violating the privacy of others.

Journalism depends on getting access to private information, there's nothing new in that.

If not you could just shield against journalistic investigations by declaring all relevant information as private.

It's the job of a journalist to be responsible when using its sources, how to disclose the information, etc. but having access to it is a foundational aspect of investigative journalism...

Re: SF Mutual Fund Exec Front-Ran His Fund's Trades

#17

Post by jarsin »

ChainOfFools wrote: post #15
jarsin wrote: post #11

Earlier quoted context omitted.

Just CTRL-F for Citadel in any of their agreements. Guaranteed someone is paying to front run for them.

I have a family acquaintance who works at a fairly prominent hft shop in nyc. He's rather circumspect when I ask him about details of his job, which doesn't directly relate to trading but I get the impression he has to know quite a bit about how the various trade plans work, since he is deeply involved in maintaining the highly bespoke infra they run on. After a few beers he'll sometimes start bringing up "customers…

Payment for order flow is why we have commision free trading. So basically all brokers have these deals.

The SEC announced plans to end it, but my guess is they will be bought off so only the most powerful can participate.

Citadel and Jane Street are basically at either end off almost every trade making billions off fractions of pennies.

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