Finnish bank forbids employees from investing in cryptocurrencies

https://yle.fi/uutiset/osasto/news/nordea_forbids_employees_from_investing_in_bitcoin_other_cryptocurrencies/10036291

by danijelb • 9 years ago

39 47 9 years ago

hx2a• 9 years ago

Isn't this normal for finance companies in the US? I used to work at a few investment banks and there were strict rules about employees reporting all financial transactions. Since cryptocurrency transactions can't be monitored in the same way that my Fidelity account can, they were all prohibited.

raphaelj• 9 years ago

I don't understand. Are we really talking about personal savings? Why are banks having anything to say on what an individual can or can't do with his/her own money?

muninn_• 9 years ago

Because of federal regulations. I have previously worked in an investment bank as well and you are not allowed to day trade, you're only allowed to trade during certain periods, and for my employer you were only allowed to have retirement accounts including things like IRAs with certain reputable companies (Vanguard, Goldman, JP, etc.).

hvidgaard• 9 years ago

If you're trading for a company, your legal work actions may impact certain markets. If you know about this beforehand, you may trade with your own money with an advantage - to prevent people abusing this, you're not allowed to trade privately if you're responsible for trading or the decisions on what to trade. Your salary should reflect this restriction.

wyldfire• 9 years ago

It seems backwards but it's to prevent things like insider trading.

For example, if this Finnish bank were planning to open its own cryptocoin exchange, the employees would have advance knowledge. They could buy or short impacted securities before the announcement/opening.

thisisit• 9 years ago

Workplaces like banks are very sensitive about what you can or can't do. This article is thin on details. Better source:

https://www.bloomberg.com/news/articles/2018-01-22/nordea-ba...

“It is widespread practice across the banking industry to restrict the personal account dealing of staff to prevent them taking positions in speculative investments, or which might expose them to a risk of financial loss and therefore impact their financial standing,” Kellberg said. “Nordea therefore, like all banks, has the right to set out policies in this area that apply to its staff.”

frgtpsswrdlame3• 9 years ago

Yes, so you don't make work-trades to advantage your personal-trades. My employer bars us from certain things like short holding periods and naked puts.

eatmyshorts• 9 years ago

Yes. The compliance team at most investment banks will prevent individuals or members of their family from trading any instrument that the firm is actively trading in without going through a "waiting period". All personal trading accounts for the employee and direct family members must be registered with the compliance team. Banks employee independent investigators to ensure their employees follow through on these requirements; violations are a fireable offense, and I have seen multiple people fired for lack of compliance.

This is to prevent insider trading, among other things. Compliance issues with individual traders can result in massive fines for their employers.

jVinc• 9 years ago

"Why are banks having anything to say on what an individual can or can't do with his/her own money?"

If they intend to do anything in the crypto world, any employees who invest prior are acting on insider information. Even suspicion will lead to investigations which will be really bad PR. They can't go out and say "you can't invest because that makes you insiders" because then they jump the gun. But they can simply add cryptos to the existing list of investments you are barred from due to your position.

Jobs have requirements, like showing up, not burning down the place, and sometimes not investing in certain assets. You sign the contract and can stop at any time if you feel like investing in crypto, not showing up or burning the place down. Though that last one you'll still get in trouble with the authorities. But if you quit first you won't be in breach of contract.

dragonwriter• 9 years ago

Why are banks having anything to say on what an individual can or can't do with his/her own money?

Conflict of interest. You can do whatever you want with your own money, but some of those things are incompatible with working for the bank.

koolba• 9 years ago

In the financial services industry it's not only common, it's near universal.

Most restrict the instruments you can trade (ex: only broad market ETFs) or require that you get management approval for all trades.

JauntTrooper• 9 years ago

Yup. Many of us are also prohibited from participating in IPOs.

teekert• 9 years ago

Don't spend your money your way, slave!

(Edit: My boss telling me what I can or cannot do with my money would be a reason for me to immediately start looking for another job. Who the hell do they think they are? I can't believe it, this article must not be telling the whole truth.)

fwdpropaganda• 9 years ago

Well obviously you've never worked in investment banking.

It's a contract. You don't like it, don't accept it. It's a free market.

jmcqk6• 9 years ago

Yes, because there is NO WAY that your personal investments might present a conflict of interest for your work in a company. /s

bsilvereagle• 9 years ago

There seems to be a lot of outcry in this thread about employers dictating what you're allowed to invest in. From what I've seen, this is fairly common.

One small company I worked for forbid more than 2% ownership in a competitor.

The federal government limits you (or your spouse & children) from investing more than $15,000 in a company you are working with: https://ethics.od.nih.gov/topics/deminimis.htm

The federal government goes so far as limiting you from owning more than $50k of sector based mutual funds: https://ethics.od.nih.gov/topics/deminimis.htm

Granted, you can own more than $15/$50k if you're willing to go through the financial disclosure bureaucratic process, but that could very well end in a change of job duties.

philipodonnell• 9 years ago

Most of the outcry is going to be from people who haven't worked in banks. Restrictions on personal investments are extremely common and if the article didn't have the word "cryptocurrencies" as a headline it would have gone unnoticed.

Vaskivo• 9 years ago

But can't you own cryptocurrencies anonymously? How are the banks going to enforce this rule?

smcl• 9 years ago

In finance it's common to have to disclose your investments to the company's Compliance department.

So sure you could own a bunch of Ethereum/BTC/Doge on the sly, in the same way that you could "anonymously" own a Panamanian or Cayman Islands company invested in a bunch of things that you don't want your company to know about.

jondubois• 9 years ago

It's not just employers that are enforcing constraints about what you can do with your own money; the government also does this. Like how in the US you can't invest in a startup via crowdfunding unless you have a high net worth (which is a requirement for becoming a certified investor). The government is basically saying; you're not rich, therefore you're an idiot and so you shouldn't be trusted to make your own financial decisions.

Ninn• 9 years ago

Not a Finnish bank, it's Nordea is present in all of Scandinavia. In addition, several other banks in Scandinavia already employs similar rules.

Strom• 9 years ago

Nordea is headquartered in Finland and even has a Finnish CEO. I think it's fair to call it a Finnish bank.

reycharles• 9 years ago

Their headquarters were in Sweden less than a year ago. Nordea is a merger of a lot of Scandinavian and Finnish banks. I don't think it's fair to call it a Finn bank.

holmb2• 9 years ago

I find it very curious if they have the legal power to enforce this. If it is not in the employment contract then a prohibition like this would not stand. Sure, the employer could try to implement this but I am quite sure it is against their labour laws.

bighi2• 9 years ago

To me (not living in the US and some other countries), it is weird if it's legal even if it's in the employment contract.

The idea of companies having the power to decide what it's employees can or can't do OUTSIDE of the company seems absurd.

holmb2• 9 years ago

I have seen these kind of prohibitions at for example Nasdaq OMX. I assume it is legal if it is agreed in a contract. There is a balance here what might be a "human right" and what could be in conflict with the best of the company -- and it would seem reasonable for a company to try this. If they will find people willing to sign that contract is another matter altogether.

Edit: typo

ols• 9 years ago

Seems like a sensible suicide prevention program.

FilterSweep2• 9 years ago

This was my takeaway. Alot of people are saying "this is standard in banks" but one its a Finnish bank, and two, their rationale (and prior stated position) on crypto is that its too risky.

If you're married with children and all of a sudden all of your savings crashes and your kid gets sick, the risk you took on goes to the company too.

lawlessone• 9 years ago

True there is a thing called the fraud triangle.

One side(point) of this triangle is pressure.

wonderwonder• 9 years ago

It makes sense in that it likely helps reduce the likelihood of employees making desperate decisions based on financial hardship. If for example an employee is heavily invested in crypto and is about to use his earnings to buy a house and the market tanks 50% they are more susceptible to accepting bribes or commiting fraud or theft. It's similar to how risk analysis is done on those seeking secret clearance. Certain behaviors regardless of intent make you vulnerable.

I'm pretty bullish on crypto and have no problem with this, especially in an industry with easy access to so much money and personal information.

kennu• 8 years ago

Some other banks in Finland (OP and Danske Bank) meanwhile have announced that they are _not_ forbidding bitcoin investing by employees, although they don’t recommend it:

https://yle.fi/uutiset/3-10038918?origin=rss

Finnish bank forbids employees from investing in cryptocurrencies

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