Trading in personal accounts
I think this is too techincal to discuss on a forum. I would recommend you seek advice from FINRA. I am sure it is addressed specifically (and as part of the S7 exam). Also, why doesn’t your husband just check his compliance manual? It doesn’t really matter what any of us think.
I have a “friend” who has this burning and itching sensation… Sorry, I couldn’t resist.
Why doesn't your "husband" just call his compliance department and ask them. Make sure he notes the answer, the date/time, and who he talked to.You all are missing the point here. We KNOW what his very conservative, paranoid insurance firm’s policy is.
I am trying to establish what OTHER more typical firms require in these instances. In other words, what is the "industry standard?"[quote=RepWife]You all are missing the point here. We KNOW what his very conservative, paranoid insurance firm’s policy is.
I am trying to establish what OTHER more typical firms require in these instances. In other words, what is the "industry standard?"[/quote] Can you post a picture first, it might help? Wait a day unless it's at a worse price than the clients.What are the details of your husbands actions that got him into trouble?
Don’t know what the deal is at your firm, but at my firm, if you buy or sell a security on the same day as a client, client always gets the best price. Of course, if you hold something and tell a client to sell, regardless of why, and the stock goes in the broker’s favor and the client finds out about it, get out your checkbook. Best practice is not to sh*t where you eat.
To answer the question of what other firms require, I know a friend a MS who was told by his branch manager that he could do it the same day as long as the trade was placed afterward so as to avoid “front running” which is a violation anywhere, although not much of a practical issue with small trades on large cap stocks. (The rule applies a lot of places even though a 100 share trade for BAC isn’t going to lift the market before the rep can get in…)
I would recommend that your husband review FINRA Interpretive Memo 2110-3 See http://finra.complinet.com/finra/display/display.html?rbid=1189&element_id=1159000472. Also look at this case. http://finraawardsonline.finra.org/turing.aspx?doc=40309 <?: prefix = o ns = "urn:schemas-microsoft-com:office:office" />
This message should not be construed as legal advice. However, if you need further assistance, please feel free to contact me.
Randall C. Place
The Law Offices of Place and Hanley, PLLC
Source URL:https://www.wealthmanagement.com/forums/legal-issues/trading-personal-accounts