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A comment on As McKinsey Sells Advice, Its Hedge Fund May Have a Stake in the Outcome. Parent comment

Re:As McKinsey Sells Advice, Its Hedge Fund May Have a Stake... by crazygringo on Tuesday February 19, 2019 @01:53PM (#19201655)
The idea that there is no problem because both McKinsey and the company want to make money seems... ludicrous to me, and completely misunderstands insider trading.

The problems would be:

1) McKinsey learns about non-public good things on the inside, and so buys even more stock than they otherwise would (pretty much the definition of insider trading) and/or sells competitors' stock

2) McKinsey learns about non-public bad things on the inside, and so sells stock they otherwise would have held and/or buys competitors' stock

I don't see how Matt Levine can possibly just brush that aside?

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Re:As McKinsey Sells Advice, Its Hedge Fund May Have a Stake... by tomp on Tuesday February 19, 2019 @04:59PM (#19203269)
Why do you think that would be more likely in a structure like McKinsey's than in other structures? E.g. many banks have such structures (e.g. trading and M&A have a "firewall" between them so that no information crosses), and obviously insider trading/market manipulation happens between companies with no (or very little) legal connections (e.g. LIBOR scandal, or most other insider trading).
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Re:As McKinsey Sells Advice, Its Hedge Fund May Have a Stake... by Nicholas_C on Tuesday February 19, 2019 @08:39PM (#19204839)
In the short time I worked for a bank during an internship it was very apparent that there is training one goes through regarding this sort of thing and a very formalized processes with strong rules about how you can even contact the other side of the house. I doubt McKinsey has this structure.

This is a pretty softball take by Matt Levine.

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Re:As McKinsey Sells Advice, Its Hedge Fund May Have a Stake... by nebolo on Wednesday February 20, 2019 @12:01AM (#19205642)
Of course McKinsey has this structure. Indeed Puerto Rico recently investigated this structure and found it up to the task: https://www.mckinsey.com/~/media/mckinsey/about%20us/media%2...
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Re:As McKinsey Sells Advice, Its Hedge Fund May Have a Stake... by the_watcher on Tuesday February 19, 2019 @09:33PM (#19205089)
Why would you assume that McKinsey doesn't also have a Chinese wall with training that MIO employees have to go through?
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Re:As McKinsey Sells Advice, Its Hedge Fund May Have a Stake... by Nicholas_C on Monday February 25, 2019 @04:45PM (#19249761)
I would assume that since McKinsey is a consulting firm primarily they don’t have to comply with the same regulations that a bank does.
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Re:As McKinsey Sells Advice, Its Hedge Fund May Have a Stake... by akozak on Tuesday February 19, 2019 @02:07PM (#19201788)
Insider trading would be bad and illegal. But absent evidence that it's happening, I think his point is that merely having a stake by holding securities isn't inherently problematic.
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Re:As McKinsey Sells Advice, Its Hedge Fund May Have a Stake... by casefields on Tuesday February 19, 2019 @08:24PM (#19204768)
The biggest risk if they were doing it is if anyone whistle blows on them that person can get a fat reward: https://www.sec.gov/whistleblower
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Re:As McKinsey Sells Advice, Its Hedge Fund May Have a Stake... by lordnacho on Tuesday February 19, 2019 @03:16PM (#19202364)
Well then McKinsey should just say which firms they have positions in, and everyone can be satisfied that there's no problem?
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Re:As McKinsey Sells Advice, Its Hedge Fund May Have a Stake... by solveit on Tuesday February 19, 2019 @07:03PM (#19204316)
McKinsey should do nothing because responding to a non-story is terrible PR.
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Re:As McKinsey Sells Advice, Its Hedge Fund May Have a Stake... by diminoten on Tuesday February 19, 2019 @08:28PM (#19204789)
Because they're signing a bunch of document saying they're not going to do exactly this, so if they are doing exactly this, well... with their own petards they shall be hoistened, and that's a given.
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