This proposed legislation creates an opportunity to address the criticism the Rule has faced and can further curtail incidents of insider trading by preventing the successful manipulation of trading plans. The bill directs the SEC to consider whether Rule 10b5-1 should be amended to: (1) limit an insider’s ability to adopt a trading plan during a particular timeframe; (2) limit the frequency with which a plan may be modified or cancelled; (3) establish a mandatory delay between adopting a plan and the first transaction pursuant to that plan; and (4) limit the adoption of multiple overlapping plans. The bill also asks that the SEC consider whether companies should be required to publicly file trading plans and transactions pursuant to those plans and whether boards of companies should adopt policies governing plans and monitor plan transactions.
‘Enforcement 40’ for 2020
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