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ARTICLE · 06 APRIL 2023

Enforcement Risks Relating To Section 10b5-1 Plans

Mayer Brown
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The US Securities and Exchange Commission ("SEC") and the Department of Justice ("DOJ") have recently taken actions that highlight their increased scrutiny on insider trading through the alleged...

United StatesCorporate/Commercial Law
J. Gregory Deis
J. Gregory Deis
Glen A. Kopp
Glen A. Kopp
Richard Rosenfeld
Richard Rosenfeld
John R. Ablan
John R. Ablan
Ravi Shah
Ravi Shah
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The US Securities and Exchange Commission ("SEC") and the Department of Justice ("DOJ") have recently taken actions that highlight their increased scrutiny on insider trading through the alleged misuse of Rule 10b5-1 Plans. This Legal Update discusses the increased enforcement related to Rule 10b5-1 Plans and the need for companies to ensure the adequacy of their insider trading policies, procedures and compliance programs, along with the risk individual traders face and steps that might mitigate these risks.

Background

Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder prohibit purchases or sales of a security while in possession of Material Non-Public Information ("MNPI") regarding the security or issuer, in breach of a duty owed to such issuer. This prohibited conduct is more commonly referred to as "insider trading." Rule 10b5-1 under the Exchange Act of 1934 provides an affirmative defense to

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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