Interviews At Citadel, Tourbillion Include Your Standard 'Interrogation By An Ex-CIA Officer' Round

Just your run-of-the-mill friendly conversation between two guys or girls getting to know each other.
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Anyone who has been hired, or attempted to get hired, for a job on Wall Street knows the financial industry likes to be extremely thorough when selecting applicants to come aboard. Goldman Sachs, for example, is known to put would-be employees through anywhere from twenty to thirty interviews before granting or denying admittance to the House o' Blankfein. Smaller boutique firms make you go on dates with the CEO before making a decision. Then you have Tourbillion Capital Partners and Citadel, which need a bit more assurance re: who they're getting involved with than 25 interviews or dinner and a movie can provide.

When asked about the characteristics that classify great employees, [Tourbillion founder] Jason Karp revealed that he has hired a former Central Intelligence Agency (CIA) interrogator to dig deeper into the personality traits of new hires. “There were a lot of things that I learned [in previous positions] that were counterintuitive about people in this business,” Karp said. “One of the things we’ve done to get around that counterintuitive notion is that at our firm— and I actually learned this two firms ago1— we administer a 3-step personality exam that’s conducted by a former CIA interrogator.

And while you’d hope you could count on people who have been trained to do this sort of thing to eliminate any potential weakness or threats on staff, Citadel founder Ken Griffin has learned that such is not always the case.

Griffin admitted that an employee who had received nuclear weapons clearance from the U.S. government attempted to “take some source code once” from the $25 billion hedge fund firm. “No matter how good the CIA is or the U.S. government is at screening for who should have nuclear weapons clearance, you can’t always trust that person. That was quite a surprise.

What it sounds like Griffin is saying here is that while it’s a great start to get your leads on new hires from a pool of people who’ve already been granted the highest levels of clearance by the government, and then have an ex-CIA interrogator put them through the paces, it’s not enough. Moving forward, if Citadel, or any other firm, wants to get a complete picture of who they’re dealing with, interviews should include:

• A bout of water boarding to see how long an applicant can last before giving up proprietary information
• An exercise in which one must trade during a simulated flash crash while Nickelback blasts through the loudspeaker.
• A Q&A administered in a sparse room with only a single overhead light that involves questions like, “Who was your 9th grade girlfriend and what do you think she’d have to say about you if she were here right now?"

The Hedge Fund Who Loved Me: Citadel, Tourbillion relay James Bond-esque hire and fire stories [HFI]

1. That would be SAC, naturally.↩

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Back in October, a former Citadel employee, Yihao “Ben” Pu, was arrested and charged with "stealing trade secrets" from Ken Griffin (by "copying company data onto a removable storage device," and then attempting to sell it to Teza Technologies AKA the firm a bunch of ex-Citadel guys tried to join in 2009 before being sued for doing so by Griffin, as well as the the shop a former Goldman programmer, Sergey Aleynikov, went to jail for after giving it proprietary GS code). Now, because apparently people just can't help themselves, KG has been forced to levy another allegation of theft against some former employees who he believes took a piece of his property when they left for high-frequency trading firm Jump Trading. Does Griffin have actual evidence that they swindled him? No, not exactly. But he's got a hunch, and that hunch is based on the fact that since 2005, when people from Citadel's "tactical trading group" started leaving for Jump, "some of the strategies" employed by the TTG "have become less profitable" and are "behaving in a way consistent with their having been copied by rivals." So what KG would like a court to do is force Jump to turn over "personnel documents, strategy and trading records, and source code," which will prove him right and the Citadel defectors to be the plunderers he knows they are.  Evidence in hand, Griffin will then sue Jump and everyone named Ken Griffin will go home happy. The only issue that needs to be worked out is Jump Trading's cooperation, which so far is proving difficult to obtain. In fact, the firm is being downright unhelpful and not only that? Its legal team has accused Griffy-boy of being the thief, or at least trying to be. That's right: the way JT sees it, Citadel's new profitable algorithm development system is a two-step process that goes something like this: Step 1: Steal successful algorithms from rival firm. Step 2: Use them. In its response filing, Jump said that Citadel had no evidence that the algorithms had become less profitable because of any of Jump's actions. It said that any of the hundreds of other algorithmic trading firms could be at fault. "The petition is nothing more than a transparent attempt by Citadel to obtain a competitive advantage by gaining access to Jump's proprietary and confidential trading strategies," Jump's motion said. Your move, KG. Citadel Accuses Jump Employees Of Stealing Secrets [Reuters]