Employer Says Member Can't Be in Investment Club
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Employer Says Member Can't Be in Investment Club One of our members has secured an internship with a big accounting firm. She says that it has been made explicitly clear that she cannot own stocks of any of the companies that are clients of her employer. So she feels that she must leave the club because about half our holdings are clients of her company. Does participating in an investment club count as owning stock in a company. I think not. Does anyone have a similar issue and how was it resolved. Hi Tom, Absolutely. Our old club, Crow River Investment Club, went through this 3 times over the years, first with American Express (now Ameriprise) and then with the 2 of the "big 3" accounting firms. Don't make it hard on this gal. Don't make her choose between the club and her job. Even as an intern, she is being groomed for a career with this company, and you don't want to hurt her chances. In each instance, when pushed, each firm was willing to let our members participate, provided we sold the companies they considered clients, and provided we signed a document providing access to our broker account for the purpose of monitoring our activities. Obviously, we were not going to do that! So the members had to go. It stinks, but it's not a good fight. Not for the club and not for her. Lynn O. Minneapolis, MN
Federal government employees are also subject to this. Certain stocks can't be owned or value limited depending on employees position. We had one member who was told by legal department to get out of club or get fired. In this case wasn't given option to sell the stock to members. On Wed, May 31, 2017 at 11:34 AM Laurie Frederiksen <laurie@bivio.biz> wrote:
Kim Klein via bivio.com <user*6206900001@bivio.com> wrote:
In each of our situations, the members were threatened with being fired, as well. Hey, the club is important, but not that important! Eventually, it prompted a clause in our bylaws that read: A new partner, who works for any branch of the government, a brokerage, or any other business than would create a conflict, or whose spouse or other family members work for an entity that would create a conflict, is responsible for clearing their pending partner status prior to a vote of their acceptance into the partnership. The partnership will not be bound by, abide by, nor will it's normal operations be influenced by, rules or regulations bestowed upon a single member. Lynn O. Thanks Lynn, we need to put your phrase into our partnership agreement. I would change it to include existing members with a new employer. I started this club in 2008 and I recently graduated with a B.A. in Accounting and Finance. I could be booted out myself if I were to go work at a big firm. John Rice ABODI Investment Club On Wed, May 31, 2017 at 8:50 AM, Lynn Ostrem via bivio.com <user*3127200001@bivio.com> wrote:
Glad you can use it, John. Your comment about adding a clause that could cause you to boot yourself make me chuckle! Lynn O. I will also add that the same is true for the brokerage firms. They have the same issues as the accountants, that the appearance of a conflict of interest is treated as a conflict in fact. You don't really need anything added to the partnership agreement. the brokerage / CPA / government employer will take care of that by firing someone that does not comply. It ain't pretty, but it happens. Mark Eckman On Wed, May 31, 2017 at 10:34 AM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Hi Mark, The only reason we put that clause into our PA was to alert potential members to the fact that they need to deal with it beforehand. On our second go-round, the member wasn't aware her employer would have an issue with it, then expected us to change how we did business to accommodate her staying in the club, That's how it ended up there. Otherwise, I would agree that you really don't need it in the bylaws. Lynn O. I realize I'm late to this game....but...in the 1980's my club had a partner who worked for the FDIC as a bank examiner. He was not permitted to own any bank stocks, for obvious reasons. KinderCare was presented in an SSG and the club wanted to purchase it. He informed us at the next meeting that KinderCare owned a bank or S&L or something that was on his "forbidden investments" list. Who would have thought that a kindergarten business would have a bank among their holdings? It was a close call and as presiding partner I was glad that the club had a house rule that no stock could be purchased at first presentation. My suggestion is that when new partners are being considered for any club, that they be asked if they have any professional restrictions on investments. |
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