Rule 16 b-3 exempts only transactions involving parties on an equal footing from the standpoint of knowledge of inside information.

Thousands of officers and directors violate section 16 (b) yearly and the companies refuse to recover the profits to the company.

And the designers of the plans, design the plans and the grant agreements to allow the officers and directors to extract extra wealth from their companies by inside trading. The plan designers are supported by some of the largest law firms in the country.

They all refuse to accept what the New York State Bar Association, the ABA and the SEC all have clearly stated. The sentence that is the topic of this article is from the NY State Bar Association's letter to the SEC of August 9, 2004. The full sentence on page 3 is repeated below:

"Rule 16b-3 is entirely consistent with the intent of Congress in enacting Section 16(b), since it exempts only transactions involving parties on an equal footing from the standpoint of knowledge of inside information."

If SEC Rule 16 b-3 exempts only transactions involving parties on an equal footing from the standpoint of knowledge of inside information, the starting point in determining whether a transaction is exempt is to determine whether parties are on equal footing.

If both parties have equal inside information, and both can use the inside information, the transaction is exempt from 16 (b) assuming appropriate "gate keeping rules are followed" and there is an SEC Rule that exempts the transaction.

However if both parties have equal inside information but one party can use the information and one party can not use it, the parties are not on equal footing. And the one who can use the inside information against the one who can not use it, is clearly on superior footing and can trade on inside information.

So if a company designs a plan where the officer or director can dispose of shares for their taxes at his discretion to the company, which can not use the same information, the company is intentionally trying to allow violations of section 16 (b) of the 1934 Act by their executives.

And the only person who is trying to stop it is the person writing this article.

But these attorneys are gathering together to obstruct the enforcement of Section 16 (b) because they are very much like Humpti Dumpti claiming there was no "collusion".

 

Regards:

John Olagues

Edited Fri, Jun 1, 2018 3:03 PM

Post Reply

You must be logged in and a member of this Groupsite in order to post a reply to this topic.
To post a reply, contact your group manager(s) Join this Groupsite

 

ECE - Equity Compensation Experts
Powered by Groupsite.com

Visibility Public Membership By Invitation or Approved Request Default Profile Professional

Your Status Not Logged-In