Insider trading case presents opportunity for employee education & prevention
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High profile case on tipping presents good example for employee education. See:
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Bruce:
Since you are discussing SEC Rule 10 b-5, why do some companies insert prohibitions on selling exchange traded calls into their Insider Trading Policies, when the sales of stock is legal and permitted by the Insider Trading Policy.
Obviously an insider can not violate 10 b-5 or Section 16 b of the 1934 Act by selling calls when the sale of stock on the same day from the same account will not violate 10 b-5 or Section 16 b.
The prohibitions in the Insider Trading Policies are made when the Compensation Stock Plans and the Grant Agreements allow sales of calls, otherwise the prohibitions in the Insider Trading Policies would not be needed.
Since the prohibitions diminish the value of the grants, does not the insertion constitute a violation of the grant contract and make the companies liable for breach of contract by the company?
John Olagues
olagues@gmail.com
http://www.slideshare.net/OLAslideshare