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Special Situations   Thursday, 04/23/20 10:44:10 AM
Re: rameper post# 806
Post # of 809 
Corner of Berkshire & Fairfax Message Board.


"Just a heads up for folks on the forum that use Interactive Brokers for some of their business - they have a new policy where they will lock you out from trading any security you own more than 1% of the outstanding shares of. When you tell them you are not an affiliate of the issuer, a compliance analyst at IB will perform due diligence to verify you are not an affiliated person. Then they will unlock your accounts to trade that security for a period of 2 weeks. Then you have to do it all over again. Every two weeks - unless you transfer the shares out to another broker.

Some companies are quite small and 1% of the shares is nothing. These also tend to be the least liquid securities to trade. The kind of securities you need to be unlocked for trading at all times in order to take advantage of momentary liquidity and price changes."

"Yes, it’s fucking terrible. To make it worse, on top of the 1% rule they seem to select positions arbitrarily, e.g. I also got restricted from trading in some securities where I own far, far less than 1%. I also hear from people that they can trade some stocks in one account but not in another. All seems quite a clusterfuck and if they keep this up I’ll probably have to move a significant part of my account elsewhere."

"The poor compliance guy I spoke to yesterday (David) sounded like he had been being screamed at by customers all day. He kept expecting me to blow up on him or something. I felt bad for the guy.. He couldn't even tell me where the cut-off of ownership was - all he would say is "something like 3/4 to 1% of shares outstanding." The main issue I'm dealing with I'm at 3% of shares outstanding and that's not close where I can sell a few over two weeks time and have them leave me alone.

We'll see how this policy evolves after they've had to do this dance every two weeks in perpetuity for a while. Its not like I'm magically going to transform into an affiliated person next month."

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