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‘Enforcement 40’ for 2020
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Join the Securities Litigation and Enforcement Group on LinkedInUS Probes Insider Trading in Prearranged Executive Stock Sales – Bloomberg
US authorities are investigating whether executives have been gaming prearranged stock-sale programs designed to thwart the possibility of insider trading. The Justice Department and Securities and Exchange Commission are using computer algorithms in a sweeping examination of preplanned equity sales by C-suite officials, according to people familiar with the matter. Investigators are concerned that some […]
SEC Charges Company Executives with Insider Trading for Allegedly Setting Up 10b5-1 Trading Plan While in Possession of MNPI | Cleary Enforcement Watch
The case is a reminder of the SEC’s ability to build insider trading cases in seemingly challenging circumstances: the Company is incorporated in the Cayman Islands and headquartered in China, both defendants reside in China, and they conducted their trading through a British Virgin Islands company. Although the Order does not detail how the SEC […]
SEC Charges Cheetah Mobile’s CEO and its Former President with Insider Trading
The Securities and Exchange Commission today charged the CEO of Cheetah Mobile Inc. and the company’s former President with insider trading for selling Cheetah Mobile’s securities, pursuant to a purported 10b5-1 trading plan, while in possession of material nonpublic information. The SEC’s order finds that Sheng Fu, the company’s CEO, and Ming Xu, its then-President […]
CEO Stock Sales Raise Questions About Insider Trading – WSJ
A Wall Street Journal analysis of 75,000 prearranged stock sales by corporate insiders, using a comprehensive compilation of the data, shows that about a fifth of them occurred within 60 trading days of a plan’s adoption. The timing in aggregate made the trades more profitable: On average, those trades preceded a downturn in share price […]
SEC Proposes Amendments Regarding Rule 10b5-1 Insider Trading Plans and Related Disclosures
The proposed amendments to Rule 10b5-1 would update the requirements for the affirmative defense, including imposing a cooling off period before trading could commence under a plan, prohibiting overlapping trading plans, and limiting single-trade plans to one trading plan per twelve month period. In addition, the proposed rules would require directors and officers to furnish […]
Blog: Bill to study and amend Rule 10b5-1 introduced in Senate | Cooley LLP – JDSupra
Last week, in a bipartisan move, Senators Chris Van Hollen and Deb Fischer reintroduced the “Promoting Transparent Standards for Corporate Insiders Act.” According to the press release, the legislation is designed to address concerns that some insiders “may be abusing loopholes in this system, which hurts everyday investors and reduces confidence in the integrity of […]
SEC Chairman: Time to “Freshen Up” Rules Governing 10b5-1 Plans – Lexology
Chairman Gensler’s comments indicate that new, additional requirements for 10b5-1 plans are likely to be coming. In prepared comments made at The Wall Street Journal’s CFO Network event on June 7, 2021, SEC Chairman Gary Gensler explained that he has asked the SEC Staff to make recommendations on how to “freshen up” Rule 10b5-1 under […]
Rule 10b5-1 Plans at 20: Enforcement Trends & Best Practices – Lexology
2020 marks the 20th anniversary of the Rule 10b5-1 plan. During its two-decade history, it has provided an affirmative defense against allegations of insider trading by corporate insiders that trade their company’s stock, even while in possession of material non-public information at the time of trading, through plans that are set up in advance. It […]
The Time Has Come to Address Rule 10b5-1 Trading Plans and Their Shortcomings | New York Law Journal
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 […]
SEC Needs to Rewrite its 10b5-1 Safe Harbor Rules | CLS Blue Sky Blog
While it is illegal for insiders to trade on material, non-public information, the SEC has created a safe harbor Rule 10b5-1 since October 2000, by allowing insiders to set up trading plans in advance of actual trading.[1] Since these planned trades are set up in advance of subsequent trading, they allow insiders to buy and […]