According to Bloomberg Business, hedge fund BlueCrest Capital Management dismissed a money manager named Nicholas O’Grady late last year after claiming he improperly divulged information about his trading to an employee at another firm.
The Bloomberg sources say 36-year-old O’Grady was fired six months after he started working at BlueCrest after allegedly giving trading information to Point72 Asset Management’s David J. Blanc via instant messages that management felt was inappropriate.
O’Grady claims he was dismissed without just cause, and has sued BlueCrest regarding an unpaid bonus. He notes he now has a new job at a financial firm that undertook an extensive review of his firing and found “no reasons for concern.”
ValueWalk's Raul Panganiban interviews William Burckart, The Investment Integration Project’s President and COO, and discuss his recent book that he co-authored, “21st Century Investing: Redirecting Financial Strategies to Drive System Change”. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors.
Low tolerance for information sharing
BlueCrest’s firing of O’Grady shows the low tolerance many hedge funds have for traders who share information today. Analysts say the increasingly low tolerance stems from a series of insider-trading convictions and market fraud allegations at financial firms over the last few years. Steven Cohen’s SAC Capital Advisors, which morphed into Point72, paid a record fine to settle charges of securities fraud last year and became a non-public family firm.
“Even if no laws were broken, companies are becoming even more sensitive to the appearance of a conflict of interest following the recent scandals,” commented Mitchel Kraskin, CEO of Compliance Science, a consulting firm that advises financial firms. “Conduct that may have been okay in the past is being closely scrutinized and firms don’t want to take any risks.”
Nicholas O’Grady was successful trader at BlueCrest
Of note, O’Grady previously worked at SAC. He was fired from BlueCrest over the summer, according to his complaint, filed on February 17th in federal court.
O’Grady’s attorney, Jonathan Sack, noted in an e-mail that O’Grady had produced over $9.2 million in profit for BlueCrest during his six months at the firm.
“Nick O’Grady is a senior level executive and extremely well-respected manager and investor with an impressive track record in the hedge-fund industry for over ten successful years,” Sack asserted. “Throughout his tenure at BlueCrest, O’Grady was a consistently instrumental employee, whose performance at BlueCrest can be characterized as exemplary.”