New SEC Rules Target Corporate Insider Trading – WSJ

Some insiders were selling shares less than a month after adopting their plans, sometimes even the same day, or adopting and initiating trading plans right before earnings announcements. Another trick has been to adopt multiple 10b5-1 plans and later selectively cancel the ones that wouldn’t work to the insider’s benefit. Potential abuses of 10b5-1 plans were the subject of a Wall Street Journal article in June that was cited in the SEC’s final rule.


Just as the old rule begot new manipulations, the new rule won’t eliminate them all. The SEC noted concern that some insiders might time market-moving disclosures around insiders’ prescheduled trading dates, delaying the release of bad news until after scheduled sales or accelerating the release of positive news so it comes out beforehand.

Source: New SEC Rules Target Corporate Insider Trading – WSJ