Am I breaking the law?
*Sanitized
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Safest bet is to consult a lawyer.
Any rando could give you wrong advice on here.
Thanks for your comment and I understand where you're coming from.
Thought this might be a helpful (and free) starting point in that, if I got several comments saying I'm missing the obvious or that "this is clearly 100% illegal", then I would know I'm probably wasting my time.
That said, I'll probably end up seeing if I can schedule a free consult with a lawyer regardless
Don't think this is explicitly breaking securities law (agree with above, ask a lawyer) but absolutely against most firms' rules. You will most likely lose your job if your firm finds out, so if you want to take it you do need to disclose it. I would expect the firm would not approve you doing this. Certainly given you would be talking about firms in the industry and sounds like some specifics on deals.
Also just generally sounds like a sketchy agreement... not trying to belittle, but who pays for transaction advice from someone in their 20s? Sounds like he wants either MNPI on the industry or just someone to work as an analyst. This is not a standard situation so I would either decline, or tread very carefully and get your firm's permission
*sanitized*
Agree you don't have to follow formal OBA rules with FINRA, but this is still a massive conflict of interest and certainly against any firm's rules (even if not explicitly spelled out in your contract). This is a small industry and not worth losing your job for someone who seems clueless and may not be in his job long either...
Clear this with your firm.
I would suggest consulting your PE firm's CFO or Head of Compliance. "Outside business activities" like this typically need to be formally logged for internal compliance reasons as well (e.g., conflicts of interest with potential LP interests, etc.), so best to clear it and be safe. Not worth making a few thousand bucks to lose your $200k+ job.
*sanitized*
Ah I see. I think you'd be even safer then since (i) you checked your contract/handbook and (ii) you don't actually have LPs. With that said, I would ask myself, "if I didn't tell my superior and they found out, would I be worried?" If anything short of no, you're probably better off sharing, albeit you could do it casually (so technically you told them...)
Thinking something like - "Pretty crazy how much I've learned here in x years. I recently had a friend ask to tap my brain to help on some M&A stuff. I would've had no idea how to do that a few years ago... Actually, do you think that's something I'd be allowed to do? I suspect he might want to pay me to make it fair." Totally spitballing.
If you love your current job, drop this offer. If you expect to look for other opportunities in the short to medium term, then you can consider doing this gig provided:
1. your current employment contract does not prohibit freelancing
2. you do not offer any advice needing a license
3. you do not divulge or trade on MNPI
4. the hourly rate and the expected total number of billable hours are worthwhile to you
5. you can do the gig without neglecting your responsibilities at the PE firm
6. both parties agree to an NDA
You can do the gig under different tax entities. An S Corp comes with some liability protection. But you can do a simple 1099 and get an insurance policy (which you would also needed for the S Corp).
Also, it's not clear if the agreement will be with this guy or with the firm.
Lastly, I have an observation on two of your phrases:
"seemed to take a liking to me based on a few small / random things"
"hasn't been incredibly clear / consistent about what he hopes to get support on"
Based on the above, it's entirely possible the man has no sound basis to seek or rely on your advice. Something to keep in mind since this could end up being a tenuous arrangement.
I think you either need to keep your current job or leave and join this place full time. Independent consulting makes more sense for retired senior execs who serve on multiple boards but aren't expected to devote all their time to any one firm.
Hire a lawyer. You should be able to be paid for expert opinion, but you have to structure it correctly and it should NOT be a secret.
Lol you're fine.
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