trading as an associate Forum

[sanzgo]

so trading (equities, fx, commodities) is a hobby of mine that i've continued throughout lawschool.

are biglaw associates barred from investing only in companies the firm has matters with or from any/all types of investing/trading?

[Anonymous User]

Totally firm-dependent. Some firms allow you to trade with pre-clearance (either through a program or having to get approval from conflicts or high-ranking partners), some firms bar you from trading anything but mutual funds or ETFs, others have no policies aside from not trading equities of clients.

Overall firms try to discourage active trading and especially day trading. Actual enforcement is pretty lax, though.

[Right2BearArms]

Any day trading is pretty much out, as is pretty much any trade of stock/debt, etc. of a client of your firm. SEC rules pretty much mean the entire firm is an insider for Section 10 liability.

Funds, ETFs and the like are generally fine at most firms as they are managed by a third party who makes the decisions regarding what individual stocks to buy.

YMMV, but I am not aware of any firms who do not have at least some restrictions on trading, but check with the firm and understand their policy.

[nealric]

so trading (equities, fx, commodities) is a hobby of mine that i've continued throughout lawschool.

are biglaw associates barred from investing only in companies the firm has matters with or from any/all types of investing/trading?

My old firm had a restricted trading list. As long as the company wasn't on the list, you were fine.

[ballouttacontrol]

I did not get any guidance at my current firm and many people actively trade. Obviously don't trade your clients, but no one would ever find out either way

[Anonymous User]

This doesn't really apply to mutual funds, right? I just buy and hold index funds and never thought to check my firm's policy about trading...

[Anonymous User]

I did not get any guidance at my current firm and many people actively trade. Obviously don't trade your clients, but no one would ever find out either way

that's not necessarily true. after a big merger or deal we get a long list of people's name asking if we know any people on the list. the list is anyone who traded around the deal announcement and made a big buck and was picked up by the SEC. you def don't want your name on that list, even if you innocently bought the company

to answer OP, at any big firm you'll have to get trades pre-approved. day trading is looked down upon and you certainly can't be sending trade requests every couple days.

I like to trade as well but in all honestly, you won't have the time to properly research stocks once you start biglaw. unless you solely rely on some filter or algorithm.

[ballouttacontrol]

I did not get any guidance at my current firm and many people actively trade. Obviously don't trade your clients, but no one would ever find out either way

that's not necessarily true. after a big merger or deal we get a long list of people's name asking if we know any people on the list. the list is anyone who traded around the deal announcement and made a big buck and was picked up by the SEC. you def don't want your name on that list, even if you innocently bought the company

to answer OP, at any big firm you'll have to get trades pre-approved. day trading is looked down upon and you certainly can't be sending trade requests every couple days.

I like to trade as well but in all honestly, you won't have the time to properly research stocks once you start biglaw. unless you solely rely on some filter or algorithm.

I'm certainly at a big firm. but not corporate

[philepistemer]

Your firm should have a policy on this, but I'd be very surprised if anyone cared about fx or commodities trading. You want to be very careful trading any equities, though. as someone mentioned above, your firm may have a restricted list.

[Mickfromgm]

so trading (equities, fx, commodities) is a hobby of mine that i've continued throughout lawschool.

are biglaw associates barred from investing only in companies the firm has matters with or from any/all types of investing/trading?

No, not in general. I haven't seen a blanket prohibition nor a questionnaire where you have to disclose your investments in firm clients or just in general (if there were, they would obviously have to carve out mutual funds or other similar pooled vehicles, I would think). That would be unrealistic to comply with or enforce in real life, as discussed below.

Obviously, large law firms would have tons of public company clients. Because of the nebulous connections between and among various entities, where you have a parent publicly traded company and gazillion private subsidiaries and affiliates below it (many with completely different names, addresses, etc.) that may be a client of the firm, they have to rely on self-restraint on the part of individual attorneys. It's fun to watch a conflict check . . . . with just one public company; it takes forever to check the subs and affiliates, and it's never perfect, because of that.

So, basically, you are asked to use your brains to discern obvious conflicts of interest. Be careful using material nonpublic information to trade (or be seen as you may have) . . . I know someone from law school who is in federal prison for insider trading, though that was an egregious situation. Somehow the SEC seems to figure out stuff.

[nealric]

I did not get any guidance at my current firm and many people actively trade. Obviously don't trade your clients, but no one would ever find out either way

that's not necessarily true. after a big merger or deal we get a long list of people's name asking if we know any people on the list. the list is anyone who traded around the deal announcement and made a big buck and was picked up by the SEC. you def don't want your name on that list, even if you innocently bought the company

to answer OP, at any big firm you'll have to get trades pre-approved. day trading is looked down upon and you certainly can't be sending trade requests every couple days.

I like to trade as well but in all honestly, you won't have the time to properly research stocks once you start biglaw. unless you solely rely on some filter or algorithm.

What firms require pre-approval of any trade? That was only true of companies on the restricted trade list at my firm.

To be honest, you are better off just buying index funds anyways. Most active traders don't beat the market. Fine if it's just a hobby I suppose.

[sanzgo]

thanks for the replies guys.

hopefully they won't bat an eye with longer-term fx + commodities trading. if not, that's okay as well.

[dailygrind]

Yeah, seems like it's not easy to do any insider trading with futures and commodities. I gotta imagine that you'll be able to freely trade there, though you should always check with your firm to see what their policy is.

[Anonymous User]

thanks for the replies guys.

hopefully they won't bat an eye with longer-term fx + commodities trading. if not, that's okay as well.

doubtful you'll have an issue, just ya know, avoid insider trading and all. I trade actively almost daily and aside from staying away from companies I actively have matters with (or their competitors, etc) I've never had an issue. Just went on margin on Snap at the earnings announcement and picked up at the fall, so I'm pretty happy with the climb back up so far. I tend to do a mix of bonds/equities/etfs, but I haven't entertained FX or commodities.

All that being said, I didn't get any guidance from my firm on any such policy to be fair. It's way different from my previous career doing iBanking where I was FINRA registered and had to register all trades prior to the trade occurring. So I like the freedom of trading as I deem necessary now.

[sundance95]

thanks for the replies guys.

hopefully they won't bat an eye with longer-term fx + commodities trading. if not, that's okay as well.

doubtful you'll have an issue, just ya know, avoid insider trading and all. I trade actively almost daily and aside from staying away from companies I actively have matters with (or their competitors, etc) I've never had an issue. Just went on margin on Snap at the earnings announcement and picked up at the fall, so I'm pretty happy with the climb back up so far. I tend to do a mix of bonds/equities/etfs, but I haven't entertained FX or commodities.

All that being said, I didn't get any guidance from my firm on any such policy to be fair. It's way different from my previous career doing iBanking where I was FINRA registered and had to register all trades prior to the trade occurring. So I like the freedom of trading as I deem necessary now.

That's cool, just hope you don't fortuitously time a trade of a firm client and the SEC decides to fuck you

Firm clients is what counts, not your matters

[Hutz_and_Goodman]

What not to do:
https://www.law360.com/articles/923152

[Mickfromgm]

What not to do:
https://www.law360.com/articles/923152

Well, you can't trust a Walter that goes by Chet.

Lawyers are really dumb - they always think they can cover their tracks with (in their minds) some elaborate scheme. And get caught. Just for million bucks (well, much less after splitting it with his business associate). My mentor used to say, "You know, if you are going to cheat, cheat big". She's right. Walter f**ked up his life over nothing. Maybe he could be Bernie's cellmate.

[2014]

My firm has a written policy requiring pre-approval for any trade outside of mutual funds and ETFs and part of that policy is a blanket ban on at least shorting. I don't know anyone who has sought clearance but i believe it requires approval by somewhat senior partners, if not a panel of them (which is deterrent enough).

[iamgeorgebush]

Are fx and commodities even subject to insider trading laws? I didn't think they were.

[heythatslife]

Are fx and commodities even subject to insider trading laws? I didn't think they were.

I doubt any single private entity even wields the power to move FX rates. Maybe theoretically possible for commodities.

[iamgeorgebush]

Are fx and commodities even subject to insider trading laws? I didn't think they were.

I doubt any single private entity even wields the power to move FX rates. Maybe theoretically possible for commodities.

Did you see that Billions episode where they try to tank Nigeria's currency?

[lawlorbust]

My firm has a written policy requiring pre-approval for any trade outside of mutual funds and ETFs and part of that policy is a blanket ban on at least shorting. I don't know anyone who has sought clearance but i believe it requires approval by somewhat senior partners, if not a panel of them (which is deterrent enough).

Just buy a short ETF

[sanzgo]

Are fx and commodities even subject to insider trading laws? I didn't think they were.

i think post-dodd frank, commodities have become more subject to insider trading laws.

i've read about people getting prosecuted for fx insider trading abroad but i think with fx, you'd have to really, really try to commit insider trading to get into any sort of trouble. still, if i had to guess, bl firms would probably prefer you just not dabble in fx at all.

[Anonymous User]

I have been blocked from an FX trade (foreign office rep'ed the govt in some way) and we basically have a ban on shorting equities (seems it's any company the firm ever did work for).

[Anonymous User]

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?