Trade errors can paralyze even the most seasoned hedge fund managers, both because of the potential magnitude of the financial losses, and because of the urgency with which such errors must be addressed and resolved. As a result, it is imperative that hedge fund managers adopt a plan as well as policies and procedures designed to prevent, detect, quickly resolve and document trade errors.
Click here to read this article, the first in a three-part series, where I talk to The Hedge Fund Law Report about the challenge of defining a trade error, a manager’s legal obligations relating to the handling of trade errors, and policies and procedures that managers should implement to prevent, detect, resolve and document trade errors.