Is it mandatory for the partner of a KPMG employee to disclose all investments and stock purchases to KPMG? | Lawhive - Solicitors & Lawyers Online
Is it mandatory for the partner of a KPMG employee to disclose all investments and stock purchases to KPMG?
My partner works for KPMG as an Assistant Manager. We're living together, so she told me as part of her job, she has to disclose all her investments including those of people closely related to her, like her partner/husband/kids. She also mentioned that I had to sell any stock if that company(the stock i own) is a client of KPMG or if it says 'restricted' in the Investment declaration system. Also, for every future purchases I had give my stock purchase details to my partner and then she would upload them in the KPMG declaration portal. She has signed a NDA with the KPMG, so i do not understand why, me, the partner has to give all my stock purchase details to her company. She also says i have to sell the stock of a company even if she's not working with the client(the stock i own) but if the client is doing business with KPMG. Is this really mandatory or are there any workarounds this?

Raymond Johnson

4th October 2021

+646

649 upvotes

Top Answer
It's not mandatory, in the sense that you can't be forced by a court order to do it. But if you don't tell her, she'll lose her job (and may have a poor onward reference). Any "workaround" is just going to be dishonest and she'll lose her job and will definitely get a poor reference. The reason this is asked for, is to prevent any blowback on KPMG for insider trading. Now, whether you want her to make a choice between you and her career, is not one for this sub.

Patricia Garcia

1st February 2022

+974

977 upvotes

NAL but I am an accountant. This is a very common restriction in the financial industry. It's required to spot and avoid potential conflicts of interest, e.g. your partner would not be allowed to work on business for X Plc if either of you hold shares in X, since she would undoubtedly come into possession of MNPI. The entire accounting profession (and Big Four in particular) is under a great deal of scrutiny at the moment due to a number of high-profile audit failures in recent years (for KPMG look no further than Carillion). I can tell you right now KPMG will not budge on this. It's industry-wide policy at this point. KPMG cannot legally force you to disclose your investments or dispose of shares in companies they audit. However it will be a condition of your partner's employment. You'll need to decide between you what's more important.

William Hurst

1st February 2022

+470

473 upvotes

Hi! I'm also an AM at a big 4 firm and I had to do this for my pension, ISA plus the same for my husband's investments. You'll only have to sell the investments if she works in Audit and the company/fund you invest in is a firm that is being audited by KPMG. Essentially this is to prevent possible insider trading. In my case I am not in Audit, so even though the investments were "restricted" I just had to do a "self-clear" option with a line to say I'm not in Audit and for my husband's accounts I said I am not involved in the decision making. It's scarier than it sounds but it is in place to prevent insider trading. Let me know if you have any other questions I literally updated this form a few months ago!

Adina Martinez

1st February 2022

+180

183 upvotes

This is really normal. It also protects you. Let’s say you coincidentally sold a stock that KPMG knew was going to fall. Try and prove to the regulator that you didn’t know about it. Even more so if you’ve tried to hide your trades! Much safer to just get compliance approval for trades first.

William Bogle

1st February 2022

+118

121 upvotes

If it helps Index funds and ETF’s are often out of scope and don’t need to be pre cleared.

Jessica Skinner

1st February 2022

+20

23 upvotes

Often having your investments managed by a discretionary manager is sufficient as well - the manager just needs to write a letter confirming that they run all your assets and do not take any instruction from you with regards to specific investments But even still they may say no

Willie Lindner

1st February 2022

+21

24 upvotes

It's mandatory is he wants to keep his job. Source: I work for a Big 4

Jennie Prior

1st February 2022

2 upvotes

It’s normal in this kind of business to prevent insider trading. It protects your partner (and their employer) from potential big fines and even prison sentences. It’s not “mandatory” as such, but if you don’t disclose their career is probably finished.

Robert Lewis

1st February 2022

3 upvotes

I’m an audit manager at KPMG and this is a requirement if you live together. You should provide a list of investments and then discuss with the ethics and independence team if you are actually required to sell. They have discretion but you have to declare

Mae Romero

1st February 2022

+60

63 upvotes

The need for this has been adequately covered. The workaround is not to disclose your investments, but if this is discovered your partner would be fired.