By letter to the Securities and Exchange Commission (“SEC”) Chair dated December 28, 2012, the Council of Institutional Investors (”CII”) raised its concerns about the potential misuse of trading plans that are intended to satisfy the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934. CII noted that the timing of the adoption of some new trading plans may be prompted, in part, by efforts to shield or protect insiders who had only recently come into possession of inside information. In essence, the implementation of such plans may be less a function of a sincere desire to achieve aspirational corporate governance standards and more a scramble to give the appearance of compliance — perhaps, at worst, even to provide an inside trader with the appearance of sanctioned conduct. More bluntly stated, these scrambles for implementing new trading rules may be little more than CYA.
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