As the title says I used Robinhood this year to trade a very small personal account. Unfortunately, I did not check my bank's compliance until year end. I just noticed that Robinhood is not an approved broker and I'm unsure if the stocks I traded were on our company's banned list at the time of execution. I voluntarily reported my Robinhood account to compliance last week, however, are there any steps I should take to get in front of this? Or just wait to hear if there is a problem? The trades were very small <$1,000, but still I fear I broke bank rules/regulations. What are your thoughts on how I can best handle this to mitigate potential damage?
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You're going to jail buddy
You’re kind of an idiot. Not only were you on a non approved broker but didn’t get trade approval beforehand. At the two shops I’ve been at compliance made it pretty clear on approved brokers and processes for buying stocks. I’m not sure what compliance will do but I would expect some type of slap on the wrist. Maybe affect your bonus. At the first shop I was at they took compliance stuff very seriously and would ding people’s bonuses if you were late in doing just continuing education assignments they would give us. Anyways good luck
Tbh HR/compliance could get you fired over this.
Probs as everyone else said, a dock in bonus. Unless you’ve been trading restricted stocks (i.e. firm has material info) then you’ll probs be fired
Assuming you are on the private side of the bank. There's is no way you don't get fire over this. I was in a similar situation, I had a robinhood account setup 4-5 years ago, but never made any trade on it. I totally forgot about it and remember it suddenly one day. I reach out to compliance in regards to this. I was fired after 2 weeks. I was working at a top BB, so maybe compliance was taken more seriously.
I'm pretty sure I'm on the public side. I work in project finance and do only debt financings. Nothing equity related. What makes me think I'm on the public side is our ER and S&T guys ping me directly but aren't able to talk to the pure IBD team . Thoughts?
Not public side. The debt also affects capital structure which impacts equity.
Not to mention some developers are publicly traded or are competing against firms that are publicly traded.
Thx prospect
Yeah I call bullshit on this. Unless you use the account you're in the clear. This happened to me at one institution, and I told them I never made any trades and completely forgot I had the account. They only made me disclose my account and that was that.
Same.
Hi, apologies I know this is an old thread - please could you elaborate a bit on this? Am in a similar position so would be great to understand more
Recruit for p72
How does this even happen? Any investment bank has a million required compliance trainings/sessions/emails/reminders, it's unthinkable you just missed them all - even missing that Robinhood is not approved, getting every trade approved is standard practice anywhere.
Unfortunately this is multiple regulatory violations and I'd expect to get fired, start applying elsewhere ASAP.
I agree it is unthinkable. I just never considered this would be an issue. Shame on me ik...now I'm just waiting for that email/call from compliance. Hopefully they let me stay on and take 50% of bonus or something. I actually lost $ on the year it's not like I'd owe back profits
Yeah, with the amount of reminders you get from compliance, and the BASIC knowledge that every trade must be cleared first, I'd expect to get fired immediately. I don't think they'll let you stay on and take 50% of your bonus or whatever you expect. I'd move forward with the idea you'll be fired, and anything else will be a miracle.
I don't disagree and will find out soon enough. Just said my first prayer in years.
Good luck with everything op. Hope everything works out best for you. Hang in there.
Thank you. I've been with the firm 4 years and have good relationships with heads of departments so I'm hoping they can see this is all one big mistake and won't want to hire/retrain someone etc. Not counting on it tho
I think you should have just kept it to yourself at this point. It doesn't matter that you have a good relationship with the heads, the bank cares about its image. A journalist/gov agency that publishes report with the title "Employee traded stock without clearing with compliance" will get lots of negative publicity.
I don't think a $5K account that lost $ on the year trading 98% stocks not on restricted list would make headlines but your point is well taken. It's actually illegal to not disclose the account - I'd rather get fired now than get fired down the line + have legal trouble when they invariably find out
I'm surprised nothing has happened to you yet. I would just wait it out. You did your part. In normal times you would be kicked out that same day for doing something like that (in my firm you would be kicked out literally 1 hour after sending that email). Maybe you'll get lucky, but be prepared for the worst.
If you didn’t say anything, how would you presume your bank would eventually find out?
I'm not an expert in compliance but I'm sure there are checks in place that go beyond the employee's self reporting. I fucked up, yes, but I'm hoping to get this all sorted out and come clean if/when they inquire. If they fire me, fine, I was in the wrong and I'll land on my feet. As I mentioned above, it's actually illegal to not disclose accounts - now that I have my eyes open to the situation, I'm not about to dig myself deeper by not reporting.
Just being conscious of this as an incoming summer at a BB, I just need to deactivate my RH account and wait a couple of days for it to go through I presume.
Your bank will let you know ahead of time what brokers are allowed. Mine allowed summer analysts to keep their Robinhood and make trades. Cant use it when your an analyst though.
why would you even report that lol dumb move. what doesnt get caught didnt happen
The OP just said he's on the public side of the business. If you are then I don't think it matters as much, because he have no access to private information. I really don't think it will be as big as a issue. However, I agree with others that you should recruit elsewhere and have a plan B prior to getting fired.
Agreed. I don't have access to private information on equities and can prove I didn't profit (I marginally lost $ on this account). I traded stocks not covered by our ER group and therefore wouldn't be on our restricted list. Biggest infraction is not getting trades approved imo
Yeah was incidentally talking to someone in s&t today and they mentioned that you can definitely trade individual stocks in your personal account to a certain extent but not ones covered by the bank's ER team for example (context was that I was talking about a trade I made in my own personal book because i'm a student). But it was implied that the people who were doing that were all doing it under a specific approved broker. I would consult with some sort of legal expert on this?
If I was you, I would end the account and just pretend it didn't happen. If you've been doing it all year and you haven't been caught yet, just count your lucky stars and delete the app. Also have a plan B in case you get fired.
Unfortunately I already reported the account in late December to a third party compliance group that works with our bank.
Just hope it goes well. If you reported it already there's not much you can do about it aside from looking into other roles in case shit goes south here.
Should have kept your mouth shut. Never give up what someone else doesn't know. I would have stopped trading and if they ever came at me id have said my little brother used my account without permission. Considering its under 1K it would make sense.
Were there any repercussions? Can you update us on what happened?
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