Finnish bank forbids employees from investing in cryptocurrencies | Hacker News Reader

Finnish bank forbids employees from investing in cryptocurrencies

yle.fi

39 pointsdanijelb53 comments

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.

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.

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

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.

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.

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.

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?

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.).

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.

The article says that all employees are going to be restricted. That seems a bit ridiculous.

Typically, anyone working at an investment firm may be privy to material information, and is banned from investing in any security that that firm has in their universe. Doesn't matter if you actually do the trading.

I don't understand. Does Nordea trade in bitcoin? This is a quote in this Reuters article ( https://www.reuters.com/article/uk-nordea-bitcoin/banking-gr... ):

> “The risks are seen as too high and the protection is insufficient for both the co-workers and the bank,” a Nordea spokeswoman told Reuters in an e-mail, adding that employees who currently own cryptocurrencies will not be forced to sell them, although recommended to do so.

They don't seem to say anything about Nordea workers having any privy information. By their rationale, I don't understand why they wouldn't be unable to declare any instrument off the table. I'm kind of surprised that this kind of unilateral change of workers' rights is allowed in Sweden.

Crypto markets are small enough that there's a risk of employees buying in and then evangelizing clients in order to boost their own investments. It's basically impossible to do that in traditional markets.

According to this site ( https://www.coindesk.com/price/ ) the value of the bitcoin market is more than $100 billion. That doesn't exactly seem like a small market. I could sort of see the argument on smaller up and coming crypto-currencies, but not for bitcoin.

Compared to stock markets, liquidity is low. Fake news can (and recently has) killed 30% of the market's value in a day.

I really think there is far too much arbitrary reasoning here and I still don't understand how your average Nordea secretary is well-positioned to influence the bitcoin market. All of the reasoning I've read here seems to apply equally well to all Scandinavians if it applies to all of Nordea workers. It seems to me that a better approach would be for financial regulators to make these decisions or at least provide more warning time than a little over a month. Most Swedes I know need to give at least 3 months notice when quitting. I would hope that Nordea's actions mean that employees could at least quit early if they so choose.

Well it's really a problem in so far as the bank employee thinks they can influence the market. The bank may care marginally about an employee influencing crypto markets but what they're really worried about is an employee influencing bank customers.

There is a huge and pervasive belief in the bitcoin community that they really need to talk up bitcoin, nothing that can happen to bitcoin is really bad, it's destined to climb higher, etc. Even on this board I've read stuff like 'if the top 1% only put 1% of their portfolios in bitcoin it would be worth a gajillion times more.' I can understand wanting to make sure your employees aren't feeling that same way when they're making investment decisions with other peoples money.

Would that not be considered insider trading, in which case the employee is privately committing a criminal offense, and thus does not require any additional restrictions?

Insider trading is a huge part of what they're trying to avoid - intentional or otherwise. It puts the firm at risk if their employees are making dubious trades, even on their own time with their own money

It makes sense that the company wishes to avoid insider trading, but it doesn't make sense that the company is telling its employees to not commit a criminal offense. It should be obvious, and the disincentives by the company is nothing compared to huge fines and time in jail.

It's not just that the tell them not to, they actively audit for it. It's a risk to the company, not just a personal risk to the employee

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.

But if that was the reason, why also ban bitcoin and other crptocoins?

Also, why is it even legal? Companies shouldn't have the power to decide what its employees can or can't do with their own time or money.

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.”

Are we sure we're clear over what is violating noncompetes / "insider trading" vs. I want to avoid my employees undergoing complete financial ruin if X-coin crashes

What tipped me off was this statement:

> which might expose them to a risk of financial loss and therefore impact their financial standing

The question isn't whether they can (they just did) but "why"? Their reasoning (unless article is cutting this out) doesn't go into insider trading.

Just speculating, but when an employee is suddenly short on cash, they might feel tempted to take some home from their job. So banks would try to make sure that their employees are more interested in their continued income over the long term, rather than a single large payday.

Even low level employees at a bank can do amazingly large amount of damage to bank customers and access enormous amount of money. While such actions can be unwound by the banks it is very costly and time consuming. It may also result in sanctions.

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.

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.

"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.

> 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.

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.

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

Seems like a sensible suicide prevention program.

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.

True there is a thing called the fraud triangle.

One side(point) of this triangle is pressure.

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.

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

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

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.

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

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.

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.

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

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.)

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.

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

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