Restrictions on trading during SA

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Anonymous User
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Restrictions on trading during SA

Postby Anonymous User » Sun Apr 19, 2015 2:11 pm

I've yet to hear from anyone at my firm on this but curious if there is a general view to not do any trading during SA. I was planning on investing most of the money i make this summer so curious how this would work. I was in IB before law school and my FINRA registration required me to notify the firm and FINRA before or immediately after i conducted a trade - is that going to be the same here? I'll be working in Big Law Transactional

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minnbills
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Re: Restrictions on trading during SA

Postby minnbills » Sun Apr 19, 2015 2:29 pm

Anonymous User wrote:I've yet to hear from anyone at my firm on this but curious if there is a general view to not do any trading during SA. I was planning on investing most of the money i make this summer so curious how this would work. I was in IB before law school and my FINRA registration required me to notify the firm and FINRA before or immediately after i conducted a trade - is that going to be the same here? I'll be working in Big Law Transactional


I think the short answer is don't do it until after the SA. An accidental insider trading issue sounds like an easy way to screw up your offer. Not worth the risk IMO.

I would just throw it in your savings then invest/trade after your SA.

masque du pantsu
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Re: Restrictions on trading during SA

Postby masque du pantsu » Sun Apr 19, 2015 3:47 pm

The above reply is the short answer. You can't trade in the securities of any issuer about which the firm has material non-public information (which will be a lot of issuers), and pretty much all firms will have policies and procedures in place to prevent that from happening accidentally. With mine, trades in individual securities must be cleared ahead of time, but you can buy and sell broad market ETFs and mutual funds without pre-clearing.

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Re: Restrictions on trading during SA

Postby Anonymous User » Sun Apr 19, 2015 3:58 pm

masque du pantsu wrote:The above reply is the short answer. You can't trade in the securities of any issuer about which the firm has material non-public information (which will be a lot of issuers), and pretty much all firms will have policies and procedures in place to prevent that from happening accidentally. With mine, trades in individual securities must be cleared ahead of time, but you can buy and sell broad market ETFs and mutual funds without pre-clearing.


This is what i thought - recently i've been doing more investing via ETFs b/c of there being no commission, but i've since switched the Robinhood which allows trading stock commission free.

Would investing with Betterment and Acorns generally be allowed w/o issue since i just set allocation and not the specific stock?

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2014
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Re: Restrictions on trading during SA

Postby 2014 » Sun Apr 19, 2015 5:45 pm

The clearing process is done by someone at the firm who has no relation to recruiting. I'd probably ask them if a fund is ok but otherwise running by one trade through them won't generate any bad will. Just don't attempt to day trade and draw attention to yourself.

shock259
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Re: Restrictions on trading during SA

Postby shock259 » Sun Apr 19, 2015 9:27 pm

Different firms have different policies, but many require you the firm to pre-clear any trades you make.

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Re: Restrictions on trading during SA

Postby Anonymous User » Mon Apr 20, 2015 3:19 am

My firm has a tool that allows you to enter ticker symbols and it tells you if you're allowed to trade in the security or not. I don't think it's quite as strict as IB since you're usually not under FINRA.

masque du pantsu
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Re: Restrictions on trading during SA

Postby masque du pantsu » Tue Apr 21, 2015 10:39 am

Anonymous User wrote:
masque du pantsu wrote:The above reply is the short answer. You can't trade in the securities of any issuer about which the firm has material non-public information (which will be a lot of issuers), and pretty much all firms will have policies and procedures in place to prevent that from happening accidentally. With mine, trades in individual securities must be cleared ahead of time, but you can buy and sell broad market ETFs and mutual funds without pre-clearing.


This is what i thought - recently i've been doing more investing via ETFs b/c of there being no commission, but i've since switched the Robinhood which allows trading stock commission free.

Would investing with Betterment and Acorns generally be allowed w/o issue since i just set allocation and not the specific stock?


That's a good question, and the popularity of those programs being kind of new, they might not have a specific policy yet. Definitely something you'd talk to them about, though.

For my SA, on like day 1 we had to review policies of the firm (including the securities trading policy) and click a box saying that we agreed to comply. A couple of contact persons (attorneys in the DC office) were listed. You'll probably do the same thing, and then you'll know who to talk to.

As to how it'll work, i'd be curious to hear. My firm's policy is that broker-directed discretionary accounts (i.e., where a broker trades for you) are fine so long as they're not telling you what they buy / you're not telling them what to buy; broad market ETFs are fine, but sector-specific ETFs would require clearance. Maybe, extrapolating from those examples, they'd require you to clear the initial setting of your allocation, and then you'd be allowed to just let it ride? Either way, better safe than sorry.

KidStuddi
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Re: Restrictions on trading during SA

Postby KidStuddi » Wed Apr 22, 2015 11:24 am

minnbills wrote:
Anonymous User wrote:I've yet to hear from anyone at my firm on this but curious if there is a general view to not do any trading during SA. I was planning on investing most of the money i make this summer so curious how this would work. I was in IB before law school and my FINRA registration required me to notify the firm and FINRA before or immediately after i conducted a trade - is that going to be the same here? I'll be working in Big Law Transactional


I think the short answer is don't do it until after the SA. An accidental insider trading issue sounds like an easy way to screw up your offer. Not worth the risk IMO.

I would just throw it in your savings then invest/trade after your SA.


I'd be pretty careful about doing it after your SA too. As others have mentioned, there are pretty strict policies against trading in any company your firm has insider information on. There's probably a cool off period built in there too, and for good reason.

Often times after deals close we get these huge lists of names from enforcement agencies asking us if we know any of the people on the list that made a suspiciously timed trade. If your name shows up on one of those lists, accidentally or not, you're probably fucked with respect to the firm that has to explain why one of their SAs is on the list and possibly fucked with respect to the enforcement agency.

I personally wouldn't risk it. Stick to ETFs.

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Re: Restrictions on trading during SA

Postby Anonymous User » Thu Apr 30, 2015 3:42 am

Thoughts on if you hold long positions on securities heading into an SA in stocks likely subject to the firm’s do not trade policy? E.g., invested in PE firm which firm services. Should I sell before the SA to avoid any issues? Does the answer change at all if the dividend declare date is before the SA starts and the ex dividend date is after the SA starts? All moot if there’s a six month cooling period after the SA (would sell before starting full time).

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Re: Restrictions on trading during SA

Postby Anonymous User » Thu Apr 30, 2015 7:34 pm

Anonymous User wrote:Thoughts on if you hold long positions on securities heading into an SA in stocks likely subject to the firm’s do not trade policy? E.g., invested in PE firm which firm services. Should I sell before the SA to avoid any issues? Does the answer change at all if the dividend declare date is before the SA starts and the ex dividend date is after the SA starts? All moot if there’s a six month cooling period after the SA (would sell before starting full time).


OP but i would probably hold and talk to compliance to see what is needed. I'm guessing i'll probably just submit my holdings to them and let them decide.




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