Adequate Disclosure
BlueCrest Chief Financial Officer Andrew Dodd has defended the firm’s disclosures to investors, saying in 2014 that they were adequate and that the proprietary fund had existed for years to help retain the firm’s best employees. BlueCrest has procedures in place to protect against conflicts of interest across all of its hedge funds, he said.
In annual filings to the SEC, BlueCrest has long said that members of the firm may manage funds that only partners, employees or people connected with the firm invest in. The firm’s disclosures have said that such funds may compete with client accounts in instances when they’re investing in similar markets. Employee-only funds also “may produce investment results that are substantially different from those of our clients,” BlueCrest said in a January 2015 filing.
When BlueCrest announced it would return outside money, about $1 billion of the $8 billion that the firm managed belonged to Platt and his partners, a person with knowledge of the matter said in December. The figures didn’t include money in BSMA, which isn’t considered part of BlueCrest’s assets under management, the person said.
After clients get their money back, most of which is scheduled to be returned by the end of March, BlueCrest will still manage billions of dollars, according to the person.
Examining Conflicts
Examining potential conflicts involving asset managers has been a priority for the SEC.
In October, SEC Chair Mary Jo White said in a speech that the agency’s examiners had found instances in which hedge funds were running profitable trades and investments through “proprietary funds rather than client accounts in contravention of existing policies and procedures.” She was speaking generally and made no reference to any specific firm.