- The Justice Department and the Securities and Exchange Commission are hunting for a new type of insider-trading case, involving prearranged trading plans.
- The SEC first permitted such plans through a Rule 10b5-1 in 2000, but has brought only three cases in the past 20 years.
- The SEC and Justice Department recently accused Ontrak Inc. chief executive Terren Peizer of trading illegally under 10b5-1 plans.
- SEC Chair Gary Gensler has called the measure “antiquated”.
- The Wall Street Journal published an investigation in June 2022 showing that those who sold within 60 days of adopting a 10b5-1 plan often had good timing, on average selling before a downturn in the company’s stock price.
Insider-Trading Cases Once Deemed Too Hard to Crack Are Now Targets of U.S. Government
New enforcement actions focus on executives who used prearranged trading plans
Dave Michaels and Ma
/cloudfront-us-east-2.images.arcpublishing.com/reuters/IWLC5Q4X55PSLN2D43XOS23ZQU.jpg)
