I'm filling out forms required for new hires at the moment and apparently I'm required to disclose my bank accounts and financial transactions.
I understand that I must liquidate and transfer securities to my new firm and that I won't be allowed to trade derivative products. However, I don't engage in stock trading, so this part (employee trading policy) doesn't concern me.
What I'm curious to know is whether or not I am obliged to disclose private accounts (trust funds & other types of investments) which bear either my name or family members'.
My mother doesn't want to disclose any of it, and I personally don't think it is necessary either. Does anyone know if the failure to comply could result in some sort of penalties? When I was an SA at another BB, HR or compliance was rather sloppy and told me I could just ignore it so long as I didn't personally manage those accounts.
i doubt it, but just ask them to be sure.
Disclosure is better than looming possibility of penalties.
I was required to disclose brokerage accounts, but never personal savings accounts. Are you sure you have to disclose the savings accounts? You should call HR and verify exactly what needs to be disclosed.
Also, you are allowed to trade options there are just some restrictions.
Right. I should ask HR to clarify this, although I could just pretend no such accounts existed.... But I mean, HR isn't the IRS, then why would they need to monitor our savings accounts right? ha ha
You shouldn't have to disclose anything besides brokerage accounts, and if you have to transfer the accounts, you shouldn't have to liquidate the securities. As mentioned above, you shouldn't have any issues trading options either.
I didn't have to disclose any personal savings accounts or any other accounts in my parents names. My parents were wary as well especially of trust fund details, apparently the complex legality of those accounts is always better protected (i.e. from tax)
Turns out my trust funds are invested in various types of investments including hedge funds and traditional investment funds. (I believe these are considered brokerage accounts?) Do you know if these accounts will be revealed during a background check? (Most of them offshore, one with US bank.) My company says they will have an external vendor conduct a check on my financial background and creditworthiness... I don't think my previous employer did this last summer.
This may sound shady but my parents told me to turn down the offer if I had to disclose sensitive information. So I don't have much choice at this point. I just don't want to get fired after a few weeks because of this.
The answer tends to be as follows...
You must disclose all accounts that hold and house securities products in which you have a either a beneficial interest (Read: You don't have authorization to act on the account but benefit from it) or direct interest (Read: You can trade/invest/have full power of authority on an account) in. This means that if you have a series accounts in the name of a trust that you are a beneficial owner in held at JPMorgan and you work for Morgan Stanley, you need to declare each and every account number linked to that trust to Morgan Stanley. If you have your own personal accounts or joint accounts, those need to be disclosed. If you have made investments with hedge funds and in private equity, either whether they are directly with the fund or through a placement agent and held at a custodian bank, it needs to be disclosed that you have these investments. There are certain investments that your office MAY allow you to keep if they are illiquid or held elsewhere - think PE/Hedge Funds with liquidation requirements - under a Rule 407 exemption, but for the most part, liquid and nonrestrictive investments will need to be transferred accordingly. If you do get the Rule 407 exemption, then it means that all of your investments will have statements generated and sent to your firm's compliance group in order to ensure that you are not doing anything illegal.
Oh wow, looks like you know me personally! I hope you're not my company's HR ha ha
Thank you so much for this information. I know what to do now.
Yea, Frieds is kind of a badass
Dude just do the right thing and talk with your compliance about this. They can't find out about your accounts via background check as that is private info. Disclose your shit right and be able to sleep at night. Don't listen to your parents about not taking the offer that is the silliest nonsense I have heard this evening. Or if you're scared to talk to with your prospective firm's compliance than ask your parents to put you in touch with a securities lawyer/compliance officer to find out. Seems like they can afford it...
Yes, my parents have already contacted their legal advisors and bank managers. As you said, the firm cannot find out unless we voluntarily disclose such information :-) I'll start working soon. Thanks for all the comments!
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