Asking for a friend..
What would happen if someone were to open up a personal brokerage account under a non-immediate family members name to make personal trades? Has anyone done this before to get around compliance?
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Maybe slight hyperbole but my instinct there is if you’re good enough at trading/stock picking for the risk reward there to be worth it you should quit and run your PA full time
https://www.bloomberg.com/news/articles/2020-09-21/s-p-index-manager-ch…
https://nyunews.com/news/2020/02/03-stern-alum-charged-guilty-fraud/
Don't be an idiot please
I don’t think he means actively trade on insider information. It’s one thing to do that, it’s another to just want to get around cumbersome trading restrictions forced upon you by your employer. I know that in my role I don’t particularly have a lot of relevant MNPI, but still have to clear at least 3 levels of compliance just to buy a stock. Not to mention the holding period requirements. I have certainly thought about what would happen if I were to try this, but I am way too paranoid to even consider it. The risk is just way too high with potential returns that I could likely achieve with passives index funds anyway
The compliance regulations exist for reasons outside of making your life miserable tho. Even if a company was traded based on your own investment prowess, and you truly did nothing wrong, this would be the easiest slam dunk for any half-brained SEC prosecutor if there was even a whiff of POTENTIAL impropriety.
You still put yourself at risk of getting fired. My firm has a complete ban on buying and selling individual stocks so even though I have 0 insider information the PE arm of the firm might so if I got caught trading that's immediate termination. The restrictions exist for a reason, it reflects terribly on a firm if employees are doing illegal trades and this industry is built on relationships.
Is this possible to do and not get caught? Perhaps, but I personally don’t know anyone dumb enough to create fake family PAs to try and make a few bucks on the side of an already lucrative career path. Not sure how you got into a HF with this kind of poor risk-reward thinking because if anyone finds out, this behavior labels you as a huge liability for any current / future employer.
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