Day/Swing Trading, FINRA, and Employment

[kmiklas]

@kmiklas, are you enquiring about financial firms, or just general?

Both. This issue is one of the deciding factors for my next gig. I'm a C++/JavaScript developer. These skills can be applied across companies in the entire market, so I'm not limited to an industry sector.

Basically, if a position or an employment policy inhibits my ability to trade, then I won't sign. I'm more along the lines of GAT's position: if I'm going to sign with an employer, I intend to follow the policies in place: FINRA and HR alike. In my experience, sooner or later, doing things on the sly catches up with you.

If I want to continue trading, I think that most--if not all--jobs in the financial sector will be out. Also, probably not possible to work for a huge employer, like a diamond or large-cap. Their policies tend to be more restrictive.

Probably like a mid- or small-cap company, with a good cash flow. Maybe a marketing agency, or software shop?

 

[qxr1011]

Dear Peeps,

In general, what kind of companies have the fewest restrictions on personal investment accounts, day traders, and swing traders?

Not expecting that an employee could march in and set up an 8-monitor trading station with a dedicated fiber line and FIX connection to the exchange in their cube ("Yeah Boss, I'll have that status report to you in a jiffy!"). However, if a profitable opportunity arises, it would be nice to be able to swing with a move without causing trouble; a trade through a simple laptop wifi connection.

I realize that FINRA has a list of companies that they monitor (link follows). These are obviously out, but it's not that simple:

1. Some firms are surprisingly not on the list. For example, the Bank of America.. but they merged with Merrill Lynch. They are a massive bank; would other laws apply? Would an employee of BOA then be subject to FINRA regulation due to the merge with Merrill?
2. Some companies are not on the FINRA list, but other policies seem to apply. For example, someone who works for Merck is restricted in pharma stocks.
3. Some companies will even require an employee to close accounts that encourage day-trading. They really want their employees using ONLY the investment vehicles provided by the internal HR department; usually investing for more than one year in a 401k and/or IRA. They give the employee a dozen crappy mutual funds to choose from, pretty much to earn a hefty profit for the executives who shook hands with the company's "preferred vendor" of financial services. No "unapproved investments," including individual equities, options, or short positions.
4. Some companies also have internal policies against day trading, like "all trades must go through the compliance department" with a "24-hour minimum turnaround for approval" (Read this as one week). During the interview process, a blunt question like, "Do you have any policy against day or swing trading?" might not be well received. What's the appropriate way to find out company policy, and restrictions for a specific company?
5. Do any companies basically have a "Don't ask, don't tell" policy? Just do your thing, but keep quiet about it.
6. Should one be terrified to talk with the compliance department about this?
7. Does a different business arrangement (W2, corp-to-corp, or 1099) help to avoid these restrictions and policies?

Thank you for your help.

FINRA list:
https://www.finra.org/about/firms-we-regulate

legalistically speaking it is almost impossible to trade for your own account, while being employed in the industry, period

but lets be clear about one thing: 99.9999% of the public do not trade ... they do not know how to..they masturbate...

you looking to join the crowd ?

if you want to learn how to trade, you can start practicing trading on paper, while working in the industry or anywhere else, you probably will never learn... but nobody knows...

if time will come when you think you know how to trade you should stop working in the industry (if not stop working at all), and you will start trading... until you figure-out that you do not know how to trade.. and then another iteration...

 

[kmiklas]

...

Thanks for your response. After a year of study, I've come to realize just how much I have to learn about trading.

I look back now and think, "Why the HELL did I take that position? That was the dumbest thing I could have done in that situation." Live and learn, I guess. Time for another iteration.

 

[JackRab]

Both. This issue is one of the deciding factors for my next gig. I'm a C++/JavaScript developer. These skills can be applied across companies in the entire market, so I'm not limited to an industry sector.

Basically, if a position or an employment policy inhibits my ability to trade, then I won't sign. I'm more along the lines of GAT's position: if I'm going to sign with an employer, I intend to follow the policies in place: FINRA and HR alike. In my experience, sooner or later, doing things on the sly catches up with you.

If I want to continue trading, I think that most--if not all--jobs in the financial sector will be out. Also, probably not possible to work for a huge employer, like a diamond or large-cap. Their policies tend to be more restrictive.

Probably like a mid- or small-cap company, with a good cash flow. Maybe a marketing agency, or software shop?

I don't think any non-financial firm can impose restrictions on trading... except maybe when it interferes with you normal work duties... but not in advance.

So, if you stick with non-finance you'll be fine to trade whatever and whenever IMO.

 

[kmiklas]

This is the kind of thing that I most definitely want to avoid:
https://finance.yahoo.com/news/sec-charges-former-puma-biotech-214115727.html

 

[JackRab]

This is the kind of thing that I most definitely want to avoid:
https://finance.yahoo.com/news/sec-charges-former-puma-biotech-214115727.html

Yeah, but this is pretty obvious... don't trade in your own company especially if you're and exec. But they should be able to trade other biotechs...

 

[Surgo]

I don't think any non-financial firm can impose restrictions on trading

Well, they can impose a few at least. My own firm does not allow its employees to trade in its own stock (outside of a small window in each quarter), trade in derivatives for the stock at all, or have a margin account that has shares of the stock in it.

Those aren't much in the way of restrictions though. It's just one stock. And it doesn't apply to baskets like ETFs.

 

[JackRab]

Well, they can impose a few at least. My own firm does not allow its employees to trade in its own stock (outside of a small window in each quarter), trade in derivatives for the stock at all, or have a margin account that has shares of the stock in it.

Those aren't much in the way of restrictions though. It's just one stock. And it doesn't apply to baskets like ETFs.

Yeah, that's what I said 3 mins before this post. Don't trade your own company... that's a no-go..

 

[Sig]

Money, job security, threats of consequences...that's all a form of control. Who is in control of you? Your employer and the government? I thought this was the land of the free. Seems like the land of the slaves to me.

Listen, if I'm your employer and I don't want you to do things that impact my company negatively, I'm going to tell you and you're going to comply or leave. It's that simple. If you want to work for a professional firm and wear torn jeans and a T-shirt they're going to ask you to leave, despite your "freedom" to dress however the hell you want cause your 'Murican. If you want to work at my factory and not follow the required safety procedures, I'm going to fire you. If you want to work at my financial firm and I don't want my customers to perceive that my employees could be front running or otherwise taking advantage of them, I'm going to require you to follow my trading rules. Yep, I "control" you to the extent that I pay you a salary in exchange for you doing the work I'm paying you to do and following the workplace rules I set up. If you don't like the social contract we've all set up you can go live by yourself somewhere no-one else wants to be and live a life that Hobbes aptly described as "solitary, poor, nasty, brutish, and short", go into another industry where those rules don't exist (but inevitably others will), or start your own business, set your own rules, and perhaps learn that customers have a choice and brand matters. You seem to have a serious anti-establishment chip on your shoulder, "the man" must have really stuck it to you?

 

[newwurldmn]

I don't think any non-financial firm can impose restrictions on trading... except maybe when it interferes with you normal work duties... but not in advance.

So, if you stick with non-finance you'll be fine to trade whatever and whenever IMO.

They can impose any restrictions they want as long as they comply with your constitutional rights and other state and national laws. Trading your account is not one of them.