trading as an associate Forum

[Anonymous User]

he/she really needs to review the firm's trading policy and really should declare it through the appropriate protocol.

[Monochromatic Oeuvre]

A friend of mine purchased a relatively small amount (four figures) of individual stock in a company without thinking about the possibility the company might be a firm client. To his knowledge there were no major announcements around the time of the trade and the trade was based on publicly available commentary. This was not a day trade but a buy and hold trade, and the stock has appreciated modestly but not been sold. He now realizes the company might be a firm client. The friend has never worked on any matters for the company or even spoken to anyone that has.

He would like to rectify the situation but is afraid of the consequences of mentioning it to the firm. What should the friend do?

"Your friend" sure detailed a lot of reasons he has nothing to hide in that first paragraph before turning around and suggesting he might hide something in the second.

You already fucked up once by being negligent over one of the few things you genuinely have to be careful about, and went around what I'm assuming is a standard Biglaw policy designed to save you (and the firm) from your own idiocy. If you want to take the risk that whatever stern talking to you get now is worse than the potential of absolutely being fired if the firm founds out you deliberately concealed your very flaggable trade, then under New York Rule of Professional Conduct 8.3, I am obligated to make some popcorn and watch your shitshow.

[Npret]

A friend of mine purchased a relatively small amount (four figures) of individual stock in a company without thinking about the possibility the company might be a firm client. To his knowledge there were no major announcements around the time of the trade and the trade was based on publicly available commentary. This was not a day trade but a buy and hold trade, and the stock has appreciated modestly but not been sold. He now realizes the company might be a firm client. The friend has never worked on any matters for the company or even spoken to anyone that has.

He would like to rectify the situation but is afraid of the consequences of mentioning it to the firm. What should the friend do?

"Your friend" sure detailed a lot of reasons he has nothing to hide in that first paragraph before turning around and suggesting he might hide something in the second.

You already fucked up once by being negligent over one of the few things you genuinely have to be careful about, and went around what I'm assuming is a standard Biglaw policy designed to save you (and the firm) from your own idiocy. If you want to take the risk that whatever stern talking to you get now is worse than the potential of absolutely being fired if the firm founds out you deliberately concealed your very flaggable trade, then under New York Rule of Professional Conduct 8.3, I am obligated to make some popcorn and watch your shitshow.

Could deservedly get fired. Only solution is to disclose right away but without the BS of why they thought it was ok. Doubtful anyone buys those excuses.

[kaiser]

A friend of mine purchased a relatively small amount (four figures) of individual stock in a company without thinking about the possibility the company might be a firm client. To his knowledge there were no major announcements around the time of the trade and the trade was based on publicly available commentary. This was not a day trade but a buy and hold trade, and the stock has appreciated modestly but not been sold. He now realizes the company might be a firm client. The friend has never worked on any matters for the company or even spoken to anyone that has.

He would like to rectify the situation but is afraid of the consequences of mentioning it to the firm. What should the friend do?

Your "friend" should disclose immediately through the appropriate firm channels. Sitting on that info could lead to FAR worse consequences than simply disclosing and rectifying the situation. Disclose to the firm, let firm counsel guide you on how to handle, and you learn and move on. Only becomes a big deal if you sit on it, now that you know full well that its a firm client.

Policies on this vary from firm to firm. Certain firms, for example, prohibit the attorneys from trading ETFs. Others are far more permissive. The best policy is to freely ask any questions and share any concerns.

[Monochromatic Oeuvre]

A friend of mine purchased a relatively small amount (four figures) of individual stock in a company without thinking about the possibility the company might be a firm client. To his knowledge there were no major announcements around the time of the trade and the trade was based on publicly available commentary. This was not a day trade but a buy and hold trade, and the stock has appreciated modestly but not been sold. He now realizes the company might be a firm client. The friend has never worked on any matters for the company or even spoken to anyone that has.

He would like to rectify the situation but is afraid of the consequences of mentioning it to the firm. What should the friend do?

"Your friend" sure detailed a lot of reasons he has nothing to hide in that first paragraph before turning around and suggesting he might hide something in the second.

You already fucked up once by being negligent over one of the few things you genuinely have to be careful about, and went around what I'm assuming is a standard Biglaw policy designed to save you (and the firm) from your own idiocy. If you want to take the risk that whatever stern talking to you get now is worse than the potential of absolutely being fired if the firm founds out you deliberately concealed your very flaggable trade, then under New York Rule of Professional Conduct 8.3, I am obligated to make some popcorn and watch your shitshow.

Could deservedly get fired. Only solution is to disclose right away but without the BS of why they thought it was ok. Doubtful anyone buys those excuses.

I don’t make guarantees on stuff like this, but people have violated these policies before and I’ve never heard of anyone getting fired for regular negligence like this. It is *probably* not an issue that goes beyond them telling you to be more careful next time. Under some circumstances, even knowing somebody is a client can be MNPI. I would be trading on a company who I found out retained Wachtell or Bickel. I can’t imagine just sitting around in fear of getting a call on this one day because you never told anyone. Rule of thumb: If you’re not about to face the biggest punishment an entity can give you, the coverup always makes it worse.