• Share
  • Email
  • Embed
  • Like
  • Private Content
Insider Trading Pyramid 2011 - 10b5-1, Section 16, Rule 144 and more
 

Insider Trading Pyramid 2011 - 10b5-1, Section 16, Rule 144 and more

on

  • 1,741 views

A SIMPLE document that explains insider trading basics. It illustrates the different levels of staff members and the restrictions and considerations associated with them. This is a great addition to a ...

A SIMPLE document that explains insider trading basics. It illustrates the different levels of staff members and the restrictions and considerations associated with them. This is a great addition to a formal insider trading policy.

Performensation can create custom versions (details and branding) for your company or your clients. Contact us for details. 415-625-3406 / info@performensation.com

Statistics

Views

Total Views
1,741
Views on SlideShare
1,740
Embed Views
1

Actions

Likes
1
Downloads
33
Comments
0

1 Embed 1

http://www.slideshare.net 1

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Insider Trading Pyramid 2011 - 10b5-1, Section 16, Rule 144 and more Insider Trading Pyramid 2011 - 10b5-1, Section 16, Rule 144 and more Document Transcript

    • 144 Affiliates Rule  144  PaperworkThe  Insider   Sec-on  16   Repor-ng  Officers Forms  3,  4  &  5Trading  Pyramid Company  Designated  Insiders Trading  Windows  and   Blackout  Periods General  Popula-on Material  Inside   InformaBonThis  insider  pyramid   provides  a  summary  of  basic  restric5ons  placed  on  the   trading  of  an  employers  stock.    Each  area  in  the  pyramid  is  subject  to  all  restric5ons  to  its  right  and  those  below  it.Possession   of   material,   nonpublic   informaBon   regarding  the   Issuer   by  any   officer,  director   or   employee   prohibits   the   individual  from  parBcipaBng  in  the  purchase  or  sale  of  stock,  including  most  types  of  stock  opBon  exercises.General  Popula-on:  This   applies  to   anyone,   inside  or   outside  of   the   company,  who   may   wish   to   place   a  trade   in   the   companys   stock.   The  SEC   has  declared  it  illegal   to  place  a  trade  with   any  companys  stock  if  you   have   informaBon  about  that  company  that   would  cause  you  to  buy  or   sell   stock  that  has  NOT  BEEN  FORMALLY   RELEASED  TO  THE  PUBLIC.   A  formal  release   to  the  public  would  include  a   press  release   or   statement   by   an   authorized   company   official.   Generally   companies   allow   transacBons   following   a   period   of   1   or   2  business  days  aRer  the  informaBon  has  been  released  to  the  public.Company  Designated  Insiders:  These   are   people   who   are   not   subject   to   any   formal   SEC   guidelines   (other   than   those   menBoned   above),   that   the   company  considers   to   have   regular   access   to   material   inside   knowledge.   These   individuals   are   subject   to   company   imposed   Trading  Windows  and   Blackout   Periods   to  ensure  that  they  do   not   trade  during  the  especially  delicate  Bmes   immediately  preceding  the  release  of  informaBon.  These  individuals  may  also  be  required  to  have  every  trade  pre-­‐cleared  by  a  compliance  officer.Sec-on  16  Repor-ng  Officers:  These  are  individuals   that   the   SEC   considers  to  have  ready  access   to  material   inside  informaBon.  The  level   of  individual  varies  from  company  to  company  and  the  reporBng  officers  are  designated  by  the   company,  with  scruBny  by  the   SEC.   These  individuals   must  fill  out   a   Form  3  when  they  become  a  SecBon  16   reporter,  they  must   fill   out   Forms  4  within   2   business   days   in  which   there   was  reportable  acBvity.  And  they   must  fill  out   Forms  5  at   the  end  of   every  year.  The  SEC  must  be  aware  of  all  trades  transacted  by  this  group  and   will   invesBgate  any  trade(s)  that  looks   suspicious.  Fines  or  prosecuBon  will   follow  any   illegal  acBvity  by  this  group.  The  company  must  also  publish  in  their   year-­‐end  proxy  statement  any  individuals  who  have  filed   incorrectly  or   late.  The  company  may  allow  or  require  these  individuals  to  arrange  automated  “10b5-­‐1  Trading  Plans”  with  authorized  brokers.  These  plans  can  be  set-­‐up  during  periods  when  the  individual  does  not  hold  inside  informaBon  and  control  future  transacBons  without  individual  interacBon.144  Affiliates:  The  SEC   not  only  considers  these  individuals  to  have   access  to  material  inside  informaBon,  but   they  also  consider  these   individuals  to   have  the  ability,  through  their   posiBon   or  holdings,  to   impact   that   informaBon.  144   Affiliates  are  designated   because  of   their  posiBon   of  perceived   control  in   the  company  or   because  of  the  the   amount  of  stock  they  hold  in   the  company.  These   individuals  must  fill  out   all   of  the  same  paperwork  as  SecBon  16  reporters  PLUS  144  paperwork  must   be  filed  for  every  trade   they  complete,  on  the  date  of  the  trade.  They  are  subject  to  selling  and  buying  restricBons,  including  certain  mandatory  hold  periods.    ©  2011  -­‐  PerformensaBon www.performensaBon.com