Is it dangerous not to specify that you are employed in your broker account?

Buy1Sell2 said:
Brokers need to check and sometimes verify with your employer that there is no conflict of interest between your job and trading. Thank you for your time.
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This sounds intuitive but can you provide an example of a specific job I might have that would cause a broker not to take me on as a customer? If I'm an employee of IBM can I not be an ETrade customer because I might trade IBM stock? If I'm an employee of Interactive Brokers can I not be an ETrade customer because I work for a rival broker? If I'm a U.S. Senator can I not be a customer because....
Brokers aren't responsible for enforcing insider trading rules, outside company's internal compliance rules, conflict of interest rules etc., it would be an unenforceable nightmare for them if they were. I'm just curious if there is a law saying that broker's can't take on a certain kind of client, I'd like to see the specifics of that law if it exists. And if it doesn't, why ask when you're not going to take any action no matter the answer?
 
Sig said:
For sure anything that uses statistical analysis on large data sets is going to throw out outliers that technically shouldn't be thrown out. Since there are probably a vanishingly low number of very wealthy people who need insurance and can't arrange for a human to underwrite it specifically for them.....
It is frustrating though. I ran into the "self-employment" ban on a home refi when I was only a year into starting my second company. Couldn't convince the pedantic underwriter that the fact that I had more than my home's value in a bank account might need to be factored into his decision making. Or convey the idiocy that if I gave away 75% of my company I would no longer be "self-employed" and he would instantly approve me despite me being immeasurably poorer and less likely to be able to pay the mortgage. Or the fact that he was already holding my existing mortgage so any risk he faced on me he was already facing! Lost his company my mortgage payment.
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Many mortgage brokers,banks....., for many years have been much, much stricter on self employed, Sig.Never did business with Angelo Mazillo/Countrywide. I remember , actually it was before 2008 crisis LOL, I borrowed on some real estate. The MB + i picked Wells Fargo Bank[WFC]- much more paper work than a community or small town bank. WFC also MADE me sign a statement that enabled them to check my self employment fed tax returns with official IRS copies. LOL- they're looking for lies........
 
An associate was denied opening a trading account in his name. He transferred funds from a joint account with his wife. Maybe there is more info but that's what he told me, i'm just passing it on.
 
murray t turtle said:
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Many mortgage brokers,banks....., for many years have been much, much stricter on self employed, Sig.Never did business with Angelo Mazillo/Countrywide. I remember , actually it was before 2008 crisis LOL, I borrowed on some real estate. The MB + i picked Wells Fargo Bank[WFC]- much more paper work than a community or small town bank. WFC also MADE me sign a statement that enabled them to check my self employment fed tax returns with official IRS copies. LOL- they're looking for lies........
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Competent underwriting requires from the borrower both the willingness AND the ability to make the payments. It is more difficult to gauge the ability with the unemployed and requires a more rigorous approach. Obviously in the pre-crises Frank-Dodd era of mortgage paper, underwriting was an afterthought.
 
Sig said:
This sounds intuitive but can you provide an example of a specific job I might have that would cause a broker not to take me on as a customer? If I'm an employee of IBM can I not be an ETrade customer because I might trade IBM stock? If I'm an employee of Interactive Brokers can I not be an ETrade customer because I work for a rival broker? If I'm a U.S. Senator can I not be a customer because....
Brokers aren't responsible for enforcing insider trading rules, outside company's internal compliance rules, conflict of interest rules etc., it would be an unenforceable nightmare for them if they were. I'm just curious if there is a law saying that broker's can't take on a certain kind of client, I'd like to see the specifics of that law if it exists. And if it doesn't, why ask when you're not going to take any action no matter the answer?
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That's basically my point. Your broker doesn't care about enforcing regulations *unless* they would be held liable for illegal actions (insider trading, money laundering, etc.). I suspect that they only ask employment status because they have to report it to the government, but never actually investigate insider trading themselves. I don't see how brokers could be held liable for insider trading unless they failed to question incorrect information supplied by the customer. I'm just speculating here so maybe I'm wrong...has a broker ever been held liable for insider trading?
 
Sig said:
This sounds intuitive but can you provide an example of a specific job I might have that would cause a broker not to take me on as a customer?
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I have worked for investment banks in the past. Was in IT. A contractor, not employee. Still, bank demanded & got my Interactive Brokers statement every month. I was also prohibited from trading any single name stocks or options on them. They checked. Futures, broad ETFs & options on them were okay. This was all imposed by the bank, not the broker (Interactive Brokers)

Edit: Actually, it was okay to buy single name stocks. But the holding period had to be 30+ days. Which made risk management impossible, and I didn't touch any stocks while I was there. I still don't till this day :p
 
DarthSidious said:
I have worked for investment banks in the past. Was in IT. A contractor, not employee. Still, bank demanded & got my Interactive Brokers statement every month. I was also prohibited from trading any single name stocks or options on them. They checked. Futures, broad ETFs & options on them were okay. This was all imposed by the bank, not the broker (Interactive Brokers)
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Mind sharing the name of the bank? (So I know never to bother trying to apply to work there...)
 
DarthSidious said:
I have worked for investment banks in the past. Was in IT. A contractor, not employee. Still, bank demanded & got my Interactive Brokers statement every month. I was also prohibited from trading any single name stocks or options on them. They checked. Futures, broad ETFs & options on them were okay. This was all imposed by the bank, not the broker (Interactive Brokers)
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Exactly. Your employer can have any number of internal requirements, they are of no concern or interest to your broker (except to the extent that they'll send duplicate statements if you ask). Your broker couldn't care less about your employer's internal controls, and they certainly aren't responsible for ensuring you follow them.
 
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