anyone familiar with skadden's stock trading policy? Forum

[Anonymous User]

preclearance each time? total ban? i trade a lot of crypto and invest in stocks in my IRA.

[Yardbird]

Assuming it’s like every other biglaw firm, pre clearance on every stock trade/options other than mutual funds and ETFs.

On crypto, depends on firm but some cryptocurrencies may be restricted.

[Anonymous User]

preclearance each time? total ban? i trade a lot of crypto and invest in stocks in my IRA.

It's essentially a total ban with how ridiculously lengthy the approval process is. Usually if you want to make an individual trade, there will be a list of partners that have to approve your request. You need to individually email each one and get approval. It's unlikely you will get a 100% response rate, even less likely you will get 100% approvals from the responses you do receive, and nearly impossible to accomplish all of this in less than 2-3 weeks.

[Yardbird]

If you’re trying to keep up with day trading or even trading at all while in biglaw, that just won’t be doable. Usually you won’t be able to trade for 6 months following employment as well. If you do trade, you’re at risk of being fired and also for insider trading.

[Anonymous User]

Unless something has changed recently, crypto is picked up in Skadden’s policies.

[Anonymous User]

Is this normal elsewhere? I'm at a competitor firm, in lit, and wasn't aware of anything like this.

[Anonymous User]

wow im surprised its not automated...

[Yardbird]

Is this normal elsewhere? I'm at a competitor firm, in lit, and wasn't aware of anything like this.

Yes this is standard for almost every biglaw firm. It’s usually in your employee handbook. Most firms require you to annually certify that you’ve read the latest restricted list policy or handbook too.

[Anonymous User]

Is this normal elsewhere? I'm at a competitor firm, in lit, and wasn't aware of anything like this.

Yes this is standard for almost every biglaw firm. It’s usually in your employee handbook. Most firms require you to annually certify that you’ve read the latest restricted list policy or handbook too.

S&C allows buying and selling of Bitcoin and Ethereum without pre-clearance, but all other cryptos require pre-clearance (as do all stocks). Still, this was quite a 180 from as recently as slightly over a year ago, where it was a blanket ban on holding any crypto.

[Anonymous User]

is it typical for a firm to require disclosure or divestiture of all individual assets/stock holdings prior to employment? or just clearance after beginning employment?

[Anonymous User]

I have heard that Skadden effectively bans the trading of most common ETFs as well since any ETF which has a single stock making up more than 10% of the total holdings requires pre-clearance like a single stock so out goes S&P index.

[Yardbird]

is it typical for a firm to require disclosure or divestiture of all individual assets/stock holdings prior to employment? or just clearance after beginning employment?

No but you may have to disclose your ownership for potential conflict analysis (for example, if you own stock in X company and are in a sales process where X company is a potential bidder on Y company, there’s a potential conflict). Note the firm may not require this but professional ethics rules for your state may require this. The firm may also be subject to certain requirements to disclose attorneys with ownership for FINRA purposes, in connection with bankruptcies and in connection with certain public transactions. Firms will send out questionnaires to every attorney in those instances to disclose the ownership.

Generally as a rule, you do not have to divest before you start in biglaw but you may want to since you could be prohibited from exiting a poor investment because of trading restrictions. Folks I knew who had substantial investments either liquidated stocks into ETFs or transferred their stocks to an advisor who had discretionary** control over the account (and then firm restrictions don’t apply).

**discretionary meaning you can’t direct the advisor to buy or sell anything but can direct them that you need X amount of money by Y date and they can then liquidate things as they deem advisable to get you the money you need

[The Lsat Airbender]

I have heard that Skadden effectively bans the trading of most common ETFs as well since any ETF which has a single stock making up more than 10% of the total holdings requires pre-clearance like a single stock so out goes S&P index.

S&P 500 would be fine under that rule?

[Anonymous User]

I have heard that Skadden effectively bans the trading of most common ETFs as well since any ETF which has a single stock making up more than 10% of the total holdings requires pre-clearance like a single stock so out goes S&P index.

S&P 500 would be fine under that rule?

Even the Dow is ok, though just barely (for the moment).

[Anonymous User]

is it typical for a firm to require disclosure or divestiture of all individual assets/stock holdings prior to employment? or just clearance after beginning employment?

No but you may have to disclose your ownership for potential conflict analysis (for example, if you own stock in X company and are in a sales process where X company is a potential bidder on Y company, there’s a potential conflict). Note the firm may not require this but professional ethics rules for your state may require this. The firm may also be subject to certain requirements to disclose attorneys with ownership for FINRA purposes, in connection with bankruptcies and in connection with certain public transactions. Firms will send out questionnaires to every attorney in those instances to disclose the ownership.

Generally as a rule, you do not have to divest before you start in biglaw but you may want to since you could be prohibited from exiting a poor investment because of trading restrictions. Folks I knew who had substantial investments either liquidated stocks into ETFs or transferred their stocks to an advisor who had discretionary** control over the account (and then firm restrictions don’t apply).

**discretionary meaning you can’t direct the advisor to buy or sell anything but can direct them that you need X amount of money by Y date and they can then liquidate things as they deem advisable to get you the money you need

I asked about this several years ago and was told by HR that not only is pre-clearance required for any trade, but the firm even wanted to know about any existing holdings including indexes (e.g. a 401k from previous employers, which seemed ridiculous to me). I doubt they'd seriously try to actually collect that info, but as a CYA exercise my impression was they were asking for any kind of securities holding, period. I was also chatting with another associate who casually mentioned that he'd been trading on Robinhood and it had never occurred to him to preclear, so clearly this stuff is on some people's radar much more than others.

[Anonymous User]

is it typical for a firm to require disclosure or divestiture of all individual assets/stock holdings prior to employment? or just clearance after beginning employment?

No but you may have to disclose your ownership for potential conflict analysis (for example, if you own stock in X company and are in a sales process where X company is a potential bidder on Y company, there’s a potential conflict). Note the firm may not require this but professional ethics rules for your state may require this. The firm may also be subject to certain requirements to disclose attorneys with ownership for FINRA purposes, in connection with bankruptcies and in connection with certain public transactions. Firms will send out questionnaires to every attorney in those instances to disclose the ownership.

Generally as a rule, you do not have to divest before you start in biglaw but you may want to since you could be prohibited from exiting a poor investment because of trading restrictions. Folks I knew who had substantial investments either liquidated stocks into ETFs or transferred their stocks to an advisor who had discretionary** control over the account (and then firm restrictions don’t apply).

**discretionary meaning you can’t direct the advisor to buy or sell anything but can direct them that you need X amount of money by Y date and they can then liquidate things as they deem advisable to get you the money you need

I asked about this several years ago and was told by HR that not only is pre-clearance required for any trade, but the firm even wanted to know about any existing holdings including indexes (e.g. a 401k from previous employers, which seemed ridiculous to me). I doubt they'd seriously try to actually collect that info, but as a CYA exercise my impression was they were asking for any kind of securities holding, period. I was also chatting with another associate who casually mentioned that he'd been trading on Robinhood and it had never occurred to him to preclear, so clearly this stuff is on some people's radar much more than others.

what firm?