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Could anyone explain to me in simple terms how it's possible to have a blackout on Vested stock? I was under the impression that once I'm "vested" the stock is

Could anyone explain to me in simple terms how it's possible to have a blackout on Vested stock? I was under the impression that once I'm "vested" the stock is now mine and I own it like any normal stock. Are "vested" shares something different? Could I say for example sell my shares on Robinhood if the blackout wasn't in effect or are they held by some third party?

baskethead 4y ago
Companies routinely have blackout periods where employees are not allowed to sell their shares. Typically the shares from equity grants or ESPP are done by a brokerage and they can block those shares from being sold during these blackout periods. However, when someone leaves the company, they can transfer those shares out to their e-trade account or whatnot. I've done that before and it only takes a few days. After that you aren't beholden to stock blackout periods, unless you have Material Non-Public Information, which means you will probably have to figure out if you can sell without being considered insider trading.
influx 4y ago
Companies should also remove your trading window when you exit the company.
- skookum 4y ago
  Are trading blackout windows enforced in any way other than threat of dismissal? I don't think there's any external repercussions to trading during an applicable blackout, and trading on NPMI is illegal regardless of whether it is done in or out of a window.
  - vlozko 4y ago
    Usually the broker that handles RSUs for the company automatically does this. They’ll prevent you from doing such trades. You could still technically use a different broker and buy/sell but that’s probably blatant insider trading.
    - seoaeu 4y ago
      > that’s probably blatant insider trading. It is only insider trading if you are basing your trades on insider information. If your only reason for selling is “I just got laid off and need the cash” then you should be fine
filoleg 4y ago
The stock is yours, but while you are still an employee of that company, there are certain windows (usually around quarterly earnings announcement) during which you atent allowed to sell or buy. This is done as a safeguard to prevent insider trading. Once you are no longer an employee of the company, none of those restrictions apply, you are welcome to sell/buy the company stock whenever you want.
- thrown321 4y ago
  That only applies to higher management, who would know of impending layoffs.
  - filoleg 4y ago
    > That only applies to higher management, who would know of impending layoffs. Nope, that applies to anyone for whom the employment offer says it applies to. At the previous company I worked at, we had no such rule. At the current one I work for, it applies to all software engineers. At plenty other companies, including FAANG companies like Google, it applies to all software engineers as well. Apple, for example, also doesn't allow you to trade AAPL derivative options in any way whatsoever (so you aren't allowed on your own free time and even using your own money to trade puts and calls). In those cases, you cannot trade the company shares during certain weeks of each quarter, despite you fully owning those (even if you bought them on your own, before joining the company). Obviously, this only applies if you are still an employee of the company, once you leave you can do whatever you want.
    - thrown321 4y ago
      This is just nonsense. Once the stock vests it is yours. Now an official SEC blackout period is different. And if you are privy to insider information then yes you can be restricted but again it is the SEC that enforces this.
      - filoleg 4y ago
        This is not nonsense, you are speaking confidently on the matter that you have no idea about. This has nothing to do with official SEC blackout periods or roles where you have access to some specific insider information. I am literally employed at one of those companies now, and all engineers get regular emails announcing the company stock blackout. Ffs, there was a mandatory training session on stock blackout periods and how it affects engineers. Ask anyone in this thread working for Google or Apple (or plenty of other companies), and they will corroborate that it is indeed the case. For extra confirmation, you can see as much on Blind threads on the matter[0] and the official Google Code of Conduct[1]. The specifically relevant part in the code of conduct section on insider trading: "[...] periodic blackout windows when no Google employee may trade Google stock." 0. https://www.teamblind.com/post/Investing-stocks-as-Google-employee-2TuRpVhN https://www.teamblind.com/post/Investing-stocks-as-Google-em... 1. https://abc.xyz/investor/other/google-code-of-conduct/ https://abc.xyz/investor/other/google-code-of-conduct/
brk 4y ago
Vested shares are not special in and of themselves. However employees often have blackout periods for any kind of stock they hold - ESPP, RSU, Options, etc. In many cases even stock you purchased separately with your own after-tax money can be subject to a blackout (though the company would not have a mechanism to directly block your trades you could run the risk of SEC violations). The blackouts apply to employees because they often have insider information, even if that information may be of minimal real value. The SEC has really clamped down on tech stock trading in the last couple of decades. Those of us who had stock/options in the late 90's dot-com boom likely participated in several stock trades that would be outright illegal today.

baskethead 4y ago

Companies routinely have blackout periods where employees are not allowed to sell their shares. Typically the shares from equity grants or ESPP are done by a brokerage and they can block those shares from being sold during these blackout periods. However, when someone leaves the company, they can transfer those shares out to their e-trade account or whatnot. I've done that before and it only takes a few days. After that you aren't beholden to stock blackout periods, unless you have Material Non-Public Information, which means you will probably have to figure out if you can sell without being considered insider trading.

influx 4y ago

Companies should also remove your trading window when you exit the company.

skookum 4y ago
Are trading blackout windows enforced in any way other than threat of dismissal? I don't think there's any external repercussions to trading during an applicable blackout, and trading on NPMI is illegal regardless of whether it is done in or out of a window.
- vlozko 4y ago
  Usually the broker that handles RSUs for the company automatically does this. They’ll prevent you from doing such trades. You could still technically use a different broker and buy/sell but that’s probably blatant insider trading.
  - seoaeu 4y ago
    > that’s probably blatant insider trading. It is only insider trading if you are basing your trades on insider information. If your only reason for selling is “I just got laid off and need the cash” then you should be fine

filoleg 4y ago

The stock is yours, but while you are still an employee of that company, there are certain windows (usually around quarterly earnings announcement) during which you atent allowed to sell or buy. This is done as a safeguard to prevent insider trading. Once you are no longer an employee of the company, none of those restrictions apply, you are welcome to sell/buy the company stock whenever you want.

thrown321 4y ago
That only applies to higher management, who would know of impending layoffs.
- filoleg 4y ago
  > That only applies to higher management, who would know of impending layoffs. Nope, that applies to anyone for whom the employment offer says it applies to. At the previous company I worked at, we had no such rule. At the current one I work for, it applies to all software engineers. At plenty other companies, including FAANG companies like Google, it applies to all software engineers as well. Apple, for example, also doesn't allow you to trade AAPL derivative options in any way whatsoever (so you aren't allowed on your own free time and even using your own money to trade puts and calls). In those cases, you cannot trade the company shares during certain weeks of each quarter, despite you fully owning those (even if you bought them on your own, before joining the company). Obviously, this only applies if you are still an employee of the company, once you leave you can do whatever you want.
  - thrown321 4y ago
    This is just nonsense. Once the stock vests it is yours. Now an official SEC blackout period is different. And if you are privy to insider information then yes you can be restricted but again it is the SEC that enforces this.
    - filoleg 4y ago
      This is not nonsense, you are speaking confidently on the matter that you have no idea about. This has nothing to do with official SEC blackout periods or roles where you have access to some specific insider information. I am literally employed at one of those companies now, and all engineers get regular emails announcing the company stock blackout. Ffs, there was a mandatory training session on stock blackout periods and how it affects engineers. Ask anyone in this thread working for Google or Apple (or plenty of other companies), and they will corroborate that it is indeed the case. For extra confirmation, you can see as much on Blind threads on the matter[0] and the official Google Code of Conduct[1]. The specifically relevant part in the code of conduct section on insider trading: "[...] periodic blackout windows when no Google employee may trade Google stock." 0. https://www.teamblind.com/post/Investing-stocks-as-Google-employee-2TuRpVhN https://www.teamblind.com/post/Investing-stocks-as-Google-em... 1. https://abc.xyz/investor/other/google-code-of-conduct/ https://abc.xyz/investor/other/google-code-of-conduct/

brk 4y ago

Vested shares are not special in and of themselves. However employees often have blackout periods for any kind of stock they hold - ESPP, RSU, Options, etc. In many cases even stock you purchased separately with your own after-tax money can be subject to a blackout (though the company would not have a mechanism to directly block your trades you could run the risk of SEC violations). The blackouts apply to employees because they often have insider information, even if that information may be of minimal real value. The SEC has really clamped down on tech stock trading in the last couple of decades. Those of us who had stock/options in the late 90's dot-com boom likely participated in several stock trades that would be outright illegal today.