BlackRock Never Promised to Stop Monitoring Ex-Employee’s Brokerage Accounts: Judge
A former BlackRock employee who sued the firm for monitoring his brokerage account after he was laid off has lost his case, with the judge ruling that he did not make a plausible claim under the Wiretap Act.
BlackRock also did not breach its contract with the employee, the judge said, because the firm’s personal trading policies did not specify when monitoring would stop.
Armen Hacopian and wife Lusine Hayrapetyan filed a complaint in a United States District Court for the Southern District of New York in March, alleging that BlackRock had continued to monitor their family’s personal trading accounts for nearly a year after Hacopian was part of a roughly 600-person reduction in force in February 2024.
Hacopian discovered that BlackRock was still monitoring his account after his brokerage company said it needed BlackRock’s approval to deposit a $5,000 bonus payment.
Many investment advisers rely on automated feeds or duplicate brokerage statements to monitor personal trading under their code of ethics, and if a firm forgets to terminate these feeds or stop duplicate statements when an employee leaves, it can create unnecessary compliance burdens, privacy concerns and data integrity issues, said Cynthia Kelly, managing director of compliance at STP Investment Services, in an email to FundFire.
“To prevent this, it is best practice for firms to maintain a clear employee exit protocol that goes beyond the standard HR exit interview,” she said. “A detailed checklist is invaluable […] Overlooking these steps can create issues for even a well-intentioned firm,” she added. “Having a clear process and documenting completion helps protect both the firm and the departing employee.”
Read what Cynthia and other experts had to say in FundFire here.
