Michael Platt's BlueCrest kept best team for own fund while clients got inferior ones

Discussion in 'Professional Trading' started by learner88, Dec 17, 2020.

  1. This Michael Platt lacks integrity. It's ok to act on your self-interest but not ok if you take other people's money and act on your self-interest at the interest of your clients'.

    This smacks of poor integrity. I think the professionals in this forum will agree.


    On Tuesday, an answer of sorts arrived. Withoutadmitting or denying wrongdoing, BlueCrest agreed to pay $170 million to former clients to settle the matter -- one of the largest penalties the regulator has ever levied against a hedge fund. Platt, 51, wasn’t accused of wrongdoing.

    The SEC was blunt: the London-based firm failed to act in the best interests of its investors.

    Even at hedge funds, where money is the ultimate measure, the details are extraordinary. The SEC claims BlueCrest assigned its best traders and most promising hires to an internal fund for its own employees. Clients got the B-team.

    “BlueCrest repeatedly failed to act in the best interests of its investors, including by not disclosing that it was transferring its highest-performing traders to a fund that benefited its own personnel to the detriment of its fund investors,” Stephanie Avakian, head of the SEC’s enforcement division, said in astatement.

    BlueCrest started the internal fund in 2011, naming it BlueStar Master Fund, or BSMA.

    What’s clear is that BSMA began quickly picking off talent, with almost half of the rates and relative value traders who worked at BlueCrest Capital International -- the firm’s main hedge fund -- moving to the internal fund by 2015.

    The underperformance that clients experienced was significant, according to the SEC. From at least November 2012 through at least January 2015, the algorithm lagged behind its target returns by $25 million a month, the SEC said, citing an internal BlueCrest report.
  2. typo error ... act on self-interest at expense of clients.

  3. caroy


    How is this different from what happens at Renaissance Technologies and the Medallion fund whish is closed and ran only for employees? It seems to significantly out perform their other funds. Maybe the have been sued and loss or won. I'm not aware. Or maybe they are more transparent and honest in their disclosures.