Progressive Democrats and consumer advocates have long complained the rules for adopting, amending or canceling trades are far too lax, allowing insiders to game the system and reap windfalls at the expense of ordinary investors. SEC Chair Gary Gensler (pic) said on Monday that SEC staff should consider tougher restrictions on such changes and increased transparency.
WASHINGTON: The head of the U.S. Securities and Exchange Commission (SEC) said on Monday he has asked staff to tighten up a legal safe-harbor that allows corporate executives to buy or sell company stock without running afoul of insider trading laws.
The "Rule 10b5-1" trading plans allow insiders to execute trades in the company's stock on a pre-determined future date, providing legal protection against potential allegations of insider trading on material nonpublic information.
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