Trade errors can prove to be catastrophic for hedge fund managers, particularly where the firm fails to adopt policies, procedures and controls designed to appropriately identify, prevent, detect and handle such errors. The task of instituting robust trade error practices has been complicated by the lack of significant guidance in this area. Nonetheless, regulators and investors remain keenly focused on evaluating how hedge fund managers approach trade errors.
Click here to read this article, the second in a three-part series, where I talk to The Hedge Fund Law Report about strategies to prevent trade errors, detect trade errors after trade execution, report trade errors once identified, resolve trade errors and calculate losses resulting from trade errors.