Are you aware of the repercussions of owning gifted stock you are not allowed to hold? 🤔📈 #stockownership #giftedstock #financialregulations
Unveiling the intricacies of owning restricted stock 🧐💰
Why Can’t You Own Gifted Stock?
– Understand the legal implications 📜
– Comprehend the restrictions set by financial regulations 💼
– Avoid potential penalties and consequences 🚫⚡
What Should You Do with Restricted Stock?
– Consult a financial advisor for guidance 🤝💡
– Explore your options for managing gifted stock 📊
– Stay informed about regulations and compliance measures 📚🔍
You should report it to your internal personal trading dept. Are you forbidden from owning or just trading it? Owning it might not trigger any violation but selling it is trading in the restricted stock so you should check your policy before making any trades in case you need to clear it first.
That aside, your job doesn’t have a list of approved brokers you can use?
How do they enforce these rules?
Fractional shares aren’t shares. They’re a share of a share. You do not own the share in the eyes of the government.
Think of it this way: an investor buys a share of Ford. They own a share of Ford now. They decide to gather ten people and give them each an IOU for “10% of the current market price of a single piece of Ford Stock at time of trade-in.”
You are not in possession of shares. You are making an independent contract with an investor who owns Ford stock.
I’m not advocating against fractional shares, they’re a decent investment strategy for poorer folks, but you should be alright if you do not exceed the value of one share in fractions.
I’m not a lawyer.
I’m sure you have a compliance department. Just contact them and ask what to do with it, if anything.
I’ve worked for 2 large firms and both have automated broker feeds, which is basically a system whereby your financial institution will automatically tell the firm whenever your portfolio changes. When your portfolio changes, the firm is notified and then will reach out to you to “clear” your investment which is a process where you answer certain questions about the entity (such as whether you have performed services for the client, etc.). Depending on your risk profile (job, level, office, and geographic location) you may fail the clear and the independence group may require you to divest of the asset (or potentially do something else, I’m not sure).
Most firms require enrollment in ABF for all of your accounts at a certain job level and it becomes a condition of employment. The firm I work for currently watches me like a hawk, I will usually get an angry email within a few hours of a new acquisition/divestiture.
In your specific case of being gifted/inherited an asset, this would show up in your ABF (or you would be required to enter the asset manually if the account isn’t enrolled in ABF for some reason). You would try to clear and it would most likely be ok if you haven’t served the client.
And yes fractional shares are considered shares for risk and independence purposes… that’s terrible information and do not listen to that comment. It’s not about the $ amount or # of shares, it’s that you are impairing independence which has considerable risk implications regardless of whether you’re making a cent or a dollar.
Are you even allowed to use the platform that you got the gift on? Usually you can only use the big platforms like fidelity, trowe, etc. It sounds like you did a robinhood or webull promo, I would check to see if you are allowed to use whatever platform you got the gift on. Report it to your compliance team.
From someone who was in Financials but as a developer you might even be barred from opening accounts with these places. A group of us opened robinhood accounts and within the next 2 days we all got emails from people telling us to sell everything and delete our accounts or risk being fired or worse. Check what your restrictions are. It might not be as simple as a stocks but could be the systems in which you use too.
This would be why they also have a rule that you can only have accounts on platforms approved by the compliance department so that this situation would not occur – I can’t imagine a compliance department being ok with an account that can nonconsensually receive a security, but things might slip through.
Selling it immediately without getting approval is probably the worst thing you can do, so do not do that. You might end up trading on MNPI the firm knows, even if you don’t personally know, without realizing it which will turbofuck you.
Call the compliance department and ask them how you should handle this.
When my wife got promoted to Manager at a Big4 Tax group I ran into this issue. My company was a restricted entity, as the same office did our audit. As such, I was still allowed to participate in our ESPP or Long-Term Incentive program but just had to sell all shares once lockup ended.
Do these rules preclude ownership of ETF’s or mutual funds also that may own the stock?