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What does a Hedge Fund Attorney do?

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  • Written By: Patrick Roland
  • Edited By: A. Joseph
  • Last Modified Date: 02 December 2016
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A hedge fund attorney holds a responsible position in the field of investments. When a hedge fund is created and investors are found, it is the attorney's job to ensure that it is meeting all of the legal requirements by the board governing those transactions. This job requires the lawyer to understand the rapidly changing regulations, to review paperwork, to advise traders on the legality of specific actions and to represent the investment firm in court. These various duties all aim to keep the hedge fund legal and profitable for all parties involved.

A hedge fund attorney has many jobs, but his or her primary duty is to understand the hedge fund investing strategies of his or her employer. A hedge fund is an investment type in which multiple investors buy into an entire package of investments. The fund attempts to leverage the risk by short selling and using derivative methods. It is essential that the attorney knows all of the different hedge fund forms and how they work.

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Along with needing to know the business, a hedge fund attorney also must be a master of the laws pertaining to hedge funds. Most countries have a financial regulatory board that oversees trades, transactions and stocks. For example, the United States has the Securities Exchange Commission, and one of the primary jobs of this ruling board is to regulate hedge funds so that there is no unfair advantage in any trades or for any traders. These regulations constantly are changing what a hedge fund firm can and cannot do, so it is the attorney's duty to stay updated.

When a hedge fund attorney has a firm grasp on the funds and the laws, he or she can perform the daily duties of this position. Primarily, the attorney is an advisor for the traders and fund creators. He or she frequently will review new funds to ensure that they meet the requirements for structure and execution. If the attorney finds a discrepancy, he or she frequently must work to change the fund so that it falls within the legal limits.

A less frequent, but still important, role of the hedge fund attorney is representing clients in court. Hedge fund firms and those responsible for the funds can be taken into civil or criminal court on a variety of charges. If this happens, it is the attorney's responsibility to research the charges, discuss legal options with those being charged and work up a courtroom strategy to best represent them.

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