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TRADING plans arose as a byproduct of S.E.C. efforts to close a gap in the rules that defined illegal insider trading.
Tainted with inside information, the tippee faces legal risks to her preexisting or potential trading plans.
10b5-1 trading plans with short durations may be viewed with skepticism.
As a general rule, then, executives should avoid adopting multiple, overlapping 10b5-1 trading plans.
Rule 10b5-1 does not prohibit the use of multiple, overlapping trading plans.
In doing so, the court relied entirely on the defendants' 10b5-1 trading plans.
It has said it will sell those shares through predefined written trading plans.
Trading plans, however, are not right for every type of business.
Insiders who do not use trading plans, he said, can still engage in legitimate transactions.
Insiders have had plenty of other reasons to hesitate before signing up for trading plans.
That said, the adoption of multiple, overlapping 10b5-1 trading plans has drawn the skepticism of the SEC and courts.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com