Side-by-side funds manage around conflicts

Wed Nov 1, 2006

The SEC wants to ensure that retail investors don't get the short end, but some evidence suggests they do

Sometimes trades that seem ordinary can prompt Paul Wick, a managing director at money manager J. W. Seligman, to drop what he's doing and fire off a memo to the firm's compliance department. Wick wrote one such memo this spring after emptying Seligman Tech Spectrum, the hedge fund he manages, of its Oracle holdings while he only sold half of the Oracle position at Seligman Communication & Information, a mutual fund he also runs.

The trades were routine, Wick says, but the fact that both funds are under his watch and have very different compensation schemes means that many of his moves are automatically suspect to regulators. "Every time we sell out of something in its entirety [in the hedge fund] and don't do it in the mutual fund, I have to...

ISSN: 2151-1845 / CDC10004H


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