The legal version is when corporate insiders, officers, directors, employees and large shareholders, buy and sell stock in their own companies. When corporate insiders trade in their own securities, they must report their trades to the SEC. Many investors and traders use this information to identify companies with SEC Clarifies Insider Trading Rules potential, the theory being, if the insiders are buying the stock, they must know more about their company than everyone else, so it is a good idea to buy the stock.Reports of transactions by insiders are filed with the SEC on Forms 3, 4 and 5, and the SEC has an excOn August 10, 2000, the Securities and Exchange Commission (SEC) adopted Rules 10b5-1 and 10b5-2 that clarify certain principles of insider trading.
In the same release, the SEC also announced the adoption of Regulation FD (Fair Disclosure), a new regulation that prohibits public companies from selectively disclosing material information to analysts and institutional investors before making the same disclosures to individual investors and the general public. Regulation FD is discussed in a separate Issue Update.
Both of these initiatives Clarifeis in response to SEC concerns that insider trading and selective Clarifiea result in a loss of investor confidence in the integrity of the capital markets.The new Clariffies regarding insider trading and selective disclosure will become effective on October 23, 2000.Clarification of Insider Trading RulesStandard for Enforcement of Insider TradingRecent casBlogging on corporate and securities law issues affecting companies in North Texas and around the state.Exploring legal issues related to mergers and acquisitions, public offerings (including IPOs), private placements, venture capital, entity formation and corporate governance.
The U.S. Supreme Court recently ruled in the case of Salman v.