I cannot own stocks on Robinhood due to company's independence policy?

IBM / QA
joTX86

Go to company page IBM QA

 joTX86
Jul 20, 2019 37 Comments

My spouse is evaluating an offer from a Big Four accounting firm as a staff member for the assurance department. When reading the fine print of the offer we noticed that they have an independence policy requirement which states that immediate family member(including husband or wife) cannot own stocks of certain companies(well, actually a lot of blue chip companies that I'm particularly interested in). Now, I'm pretty active on Robinhood buying and selling these stocks. If my spouse accepts the offer, does that mean I can't own any of these stocks? Is there a limit up-to which I can own these stocks? What about my index fund investments, these funds invest in companies that I don't get to choose, so I cannot own index funds either? Or, am I missing something here? Interested in hearing if you have any thoughts regarding this. Thank you

Deloitte PwC Accenture
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 TOP 37 Comments
  • Oath
    Atinlay2

    Go to company page Oath

    Atinlay2
    Conflicts of interest are a thing
    Jul 20, 2019 3
  • Optum
    har849

    Go to company page Optum

    har849
    My wife works for a Big 4 as well and the independence policy (for her at least, in advisory) is limited to companies that the firm has an audit relationship with. So if her firm provides tax services, you are free to invest.

    There are also restrictions based on office location and the level at which she would be joining. Partners are more restricted.

    There are internal systems wherein you need to pre-clear the stock you intend to buy. In our case, they get a feed from all our brokerage accounts that automatically lets the firm know when I buy a security. Attestations are required every 6 months or so and any new financial relationship needs to be disclosed.
    Jul 20, 2019 5
    • Optum
      har849

      Go to company page Optum

      har849
      Think of it this way - is your wife in the course of her day to day work likely to come across any information that is not public knowledge that she could use to her advantage to gain unfairly? If the answer for given stock/mutual fund is yes, then she would be restricted.

      For example - If the Idaho office is auditing some insurance company and you are based in the Huntsville, AL office working in the advisory practice targeted to manufacturing, then you are unlikely to be restricted from trading in that ID company since the odds of you coming across anything related to that company is extremely low. OTOH, if you are based in New York City and your firm is engaged with JP Morgan or any of the tons of financial companies, even if you are focused in a different practice and industry, there is always a chance that you could come across something.

      Hope this helps.
      Jul 24, 2019
    • IBM / QA
      joTX86

      Go to company page IBM QA

       joTX86
      OP
      Ah, I see. Thanks, that's clear to me now.
      Jul 24, 2019
  • Yup as a former big 4 auditor fucking run away from that shit
    Jul 20, 2019 2
  • Everybody at Deloitte is subject to these trading controls, with different rule sets depending on which kind of service you perform. I am in consulting so the rule set is not as stringent as in audit for example, and typically I am able to clear my purchases in less than a minute by inputting what I want to buy and answering some questions about my involvement with that client. You must trade with brokers that offer integration with Deloitte’s tracking and trading system, Robinhood is not one of them, there is large list with others. Also you cannot use managed investments as in someone purchasing on your behalf because they may trade things you are not allowed to buy/sell. Funds can dicey because they may hold stock of restricted entities, but you can clear the trade of funds the same way you clear trade of stocks.
    You will need to get used to consulting your wife about being able to trade the stocks you want to buy/sell.
    The reason I say sell is that you may have purchased a stock before that company becomes a restricted entity to your wife, so you may have to either sell it off, clear it, or hold it for as long as it is restricted to your wife, as you could benefit from insider info and make substantial gains with that.
    I hope this helps.
    Jul 21, 2019 1
    • IBM / QA
      joTX86

      Go to company page IBM QA

       joTX86
      OP
      Thanks for the suggestion. I read few more documents and like you mentioned there are "whitelisted" brokers through whom I can invest money in stocks. Spouse's company will have access to audit this account. Will probably do mostly index funds and then research and invest on ones I'm allowed to.
      Jul 25, 2019
  • Facebook / Mgmt
    vjuiu

    Go to company page Facebook Mgmt

     vjuiu
    Seems pretty clear cut especially if she is an auditor. They get all access to all of the financials before the reporting goes live.
    Jul 20, 2019 1
    • IBM / QA
      joTX86

      Go to company page IBM QA

       joTX86
      OP
      @vjuiu Ok, thanks. Yes, she's going to be an auditor. Maybe that's why they think i will get benefit in evaluating stocks before information does public, got it.
      Jul 20, 2019