Priority of transactions investment, restricted, purchase, against, manager

gjcxc

Something i came to mind when i read priority of transactions.

An investment manager has a clear written mandate from his client to purchase Stock A @ $50 or better . he plans to purchase stock A for his client, then on behalf of his firm and finally for himself.

The stock touches 49. he quickly purchases it for his client, then for his firm. in the mean time the price drops to 46, at which point he purchases for himself. there are no restricted/blackout periods against trading for self and / or firm. he exerts no influence on price movement of stock, has no material non public info.in short he had no freakin clue that the price would touch 46.

does this seem like a violation of any standard?should he have not purchased for self and waited till the price touched 49 or more to avoid the mere appearance of conflict of interest?

suyash1989

First client , then the firma and then self...No violation

jim8z3

Violation! You need to size up the order and promise same execution price within the block. I am guessing..

ftwcfa

Is it a violation he purchased at $49 where the client specifically said $50 or above?

homie

Ummm normally people want to purchase lower rather than higher... he didn't say above, he said better... When buying, better is lower Just throwing this out there

thisisbrianly

No violation, the client trade was executed first and allocated to the account.

The manager was correct to ticket their trade separately.

Blocking is not appropriate in this case as "Pro" trades are executed separate from client trades.

Also the manager would most likely be required to complete Pre-clearance and obtain approval from a supervisor. This alone forces separation of trades as the ticket should match the terms of the approval( buy/ sell, price, quantity etc)

dmar

this is related to which part? equity investments?

orang3eph

ETHICS! ETHICS ! ETHICS !