Darryl Rains and Sunil Kulkarni
Insider trading restrictions can cause constant headaches for executives and their companies. Rule 10b5-1 trading plans are an ideal solution when they are properly drafted and implemented.
Darryl Rains and Sunil Kulkarni
Insider trading restrictions can cause headaches for executives and companies. Rule 10b5-1 trading plans are an ideal solution. Part 2 explores their restrictions and flexibility, and how to disclose them.
Merrill Freed and Steven Schraibman
Your advisors say now is the time to buy or sell your company stock or to exercise options. But before you proceed, you'd better understand the securities laws that apply. Otherwise, you risk losing your profits, paying big fines, attracting unwanted media attention, and perhaps even going to jail. The storm of controversy over the backdating of stock option grants shows how closely executive stock sales are scrutinized.
Julius Melnitzer
Inside Counsel
The SEC's intensified search for insider trading includes enhanced scrutiny of Rule 10b5-1 trading plans.
Jane Sasseen
BusinessWeek
Concerned about patterns of trades before bad news and abuses that signal insider trading, the SEC is looking into Rule 10b5-1 plans.
Kathleen Pender
San Francisco Chronicle
The SEC has established an "affirmative defense" against charges of illegal insider trading if a person specifically agreed to a trade in a written contract before learning important inside information. This could be a godsend for executives who own a lot of company stock and want to diversify their holdings but have trouble in finding a window of opportunity to sell.
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SEC Rule 10b5-1 provides a defense against charges of insider trading if you later trade stock while you know confidential, important information about your company. A Rule 10b5-1 trading plan is a program for the preset purchase and/or sale of your stock that meets the requirements of this SEC rule, including the need to...
SEC Rule 10b5-1 does not have many details on setting up and operating these prearranged stock-trading plans. Best practices have evolved for companies and insiders to follow. These include...
You are in luck. SEC Rule 10b5-1 now provides an affirmative defense...
A review of SEC filings and surveys shows an increase in the use of Rule 10b5-1 plans. Looking at 10b5-1 plan trades reported on Form 4...
According to experts, most Rule 10b5-1 plans cover...
Only a few companies actually require insiders to have 10b5-1 plans. However...
Some companies' policies on insider trading actually require all...
A properly developed Rule 10b5-1 plan offers you an affirmative defense against charges of insider trading. However, it is possible to lose the protection of the rule by canceling or modifying the plan while...
Using a blind trust goes beyond the protections of Rule 10b5-1 plans, yet has more restrictions. These are irrevocable grantor trusts with...
Only transactions prompt the need for filings: the mere adoption of a 10b5-1 trading plan is...
Ordinarily, a 10b5-1 plan ends if you die. However...
Once your total sales during any three-month period exceed 5,000 shares or $50,000, you must make this filing even if the sale that puts you over the threshold is much smaller. Three copies...
Both Rule 10b5-1 and the broader use of restricted stock and RSUs are new, so practices and procedures are evolving. Companies are considering the widespread use of Rule 10b5-1 plans for this...
If all the requirements for Rule 10b5-1 plans are met...
When you set up a Rule 10b5-1 trading plan, one of the key requirements is that you must not...
After the information is publicly disclosed, you should wait a reasonable amount of time for...
Some type of periodic exercise-and-sell strategy can help even out stock-price volatility, spread out your tax bill, and eliminate...
A concentrated stock position occurs when a significant chunk of your net worth is tied up in a single stock. Strategies for hedging, diversification, and liquidity include...
For senior executives, stock-settled SARs avoid the concerns about cashless exercises by officers and directors raised by...
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Insider Trading
Tax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.
