I apologize if this topic has been covered elsewhere-- I couldn't find anything.
I am starting at a large firm in a few months. I own some stock in corporations that are big enough that there will be a conflict with firm clients at some point. I have a money manager who takes care of the account (like Schwab, UBS, Edward Jones, etc.) and I am not involved in the day-to-day. Should I address the potential conflicts before I start? If so, whom should I ask? The HR person? I asked the account manager and he was totally unhelpful.
Thanks in advance!
Potential conflicts with stock shares when joining firm? Forum
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MichelleMichelle
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The Lsat Airbender
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Re: Potential conflicts with stock shares when joining firm?
Getting in touch with HR is a good first step - usually it's a partner (or committee of partners) who sets the rules about this kind of thing but if there's a policy it'll get passed down to HR. Even if you're coolio with your firm you should be careful not to violate any insider-trading laws.
My advice would just be to divest and focus on inoffensive ETFs, which is a more robust investment strategy anyway.
My advice would just be to divest and focus on inoffensive ETFs, which is a more robust investment strategy anyway.
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RedGiant
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Re: Potential conflicts with stock shares when joining firm?
You are allowed to own shares in individual corporates at most (not all) law firms. You likely need to disclose these holdings or sign a policy re insider trading when you join. The kicker is that if you own these individual names, you will not be able to sell them, or trade in them, depending on your firm, either (i) at all or (ii) without contacting someone that administers your stop list. So think about whether you want to own these specific stocks for years and your tolerance for a HOLD investment strategy (even if the company is going down the toilet). The poster above who says you may be better off selling before you join is correct that this is the simplest strategy.
Also, you may not understand how brokers work, but unless you have a wholly managed account (and pay absurd fees for this), your broker is not making any trades without your say-so. And you cannot be directing individual trades without jumping through hoops (see above) or possibly at all. So you can't say, "Oh my broker does this" because it'd still violate your firm's policy.
Imagine being called into some crusty but important partner's office to talk about your "equity activities." Yeah, you don't want that. Ask your firm now if there is no trading or a stop list (and know that companies on the stop list almost never have open windows, so you can't really divest from them if they are a current firm client--firms don't terminate representation often, so....even a stop list is not much of a solution).
Also, you may not understand how brokers work, but unless you have a wholly managed account (and pay absurd fees for this), your broker is not making any trades without your say-so. And you cannot be directing individual trades without jumping through hoops (see above) or possibly at all. So you can't say, "Oh my broker does this" because it'd still violate your firm's policy.
Imagine being called into some crusty but important partner's office to talk about your "equity activities." Yeah, you don't want that. Ask your firm now if there is no trading or a stop list (and know that companies on the stop list almost never have open windows, so you can't really divest from them if they are a current firm client--firms don't terminate representation often, so....even a stop list is not much of a solution).
