Visit This Place While You Still Can

Visit This Place While You Still Can by E.B. Tucker – International Man

Last week, I managed to trigger a U.S. Treasury Department OFAC “complete freeze” of my brokerage account. The push of one button blocked me from any action in all four accounts I hold at Fidelity.

OFAC is the Treasury’s Office of Foreign Assets Control. Its mission is to prevent funds from flowing to any entity under U.S. sanctions. That means terrorist groups and rogue regimes like North Korea, Iran, and Cuba.

My problem started when a Fidelity supervisor called me to say they’d made an error in my account the prior day. I participate in a lot of private placement and off-market transactions. Most of the stock I end up with in these deals carry a date restriction. That means I can’t sell it before a certain date. It’s essentially restricted stock.

Fidelity has a special department that deals with restricted stock. The day before the U.S. Treasury freeze, I got an email from Fidelity’s restricted stock department saying that it had cleared one of my holdings and I was free to trade it. I sold it later that day.

Turns out they jumped the gun. Some of their internal back-office paper shuffling hadn’t finished processing. This isn’t really my problem, but according to the supervisor, I needed to wire them funds equivalent to the value of my trade immediately. They’d hold these cleared funds separate from my account and release them when the paperwork tied to their mistake settled.

I sent the wire. It bounced back… internal error was the reason code. When they called to ask for another wire, I mistakenly told the supervisor, “Look, man… I’m taking off for Cuba tomorrow, and I won’t be able to—”

He cut me off.

Visit Cuba… Just Don’t Tell Anyone You’re Going

I did take off for Havana the next morning. Fidelity eventually managed to fix the settlement problem that it created. When I got home, I had to visit its local office in person with my passport. Once the compliance department was satisfied that I was physically in the U.S., it unfroze my accounts.

I’m still not sure why my mention of traveling to Havana triggered such an overreaction. I have no idea how a terrorist group or rogue regime could possibly benefit from anything I do in my brokerage account.

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