As an Associate in an investment bank more than a decade ago, I had to clear all trades with our compliance department. If we started to do business with a firm, regardless of whether I knew anything about it, I could get locked into or out of a position indefinitely. And trust me, about the only thing I was influencing was Excel.
So, yeah. This is total bullshit.
I would pay to see Martha Stewart go batshit crazy on these people.