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Tips for Avoiding Trouble With 10b5-1 Trading Plans

Melissa Klein Aguilar | September 4, 2008

Amid ongoing heightened scrutiny by enforcement authorities of activities around 10b5-1 plans, lawyers at the law firm Latham & Watkins offer some tips on best practices to ensure plans are designed and executed within the confines of the rule for which they’re named.

Robert Burwell The plans can provide protection against allegations of insider trading by prescribing a fixed schedule for when a company insider will buy or sell company stock. Still, the potential for abuse “is substantial and the possibility for the appearance of abuses in today’s environment is even greater,” according to the Aug. 18 client alert, written by Robert Burwell, James Barrall, and John Tang. “So companies should consider adopting guidelines for the adoption of plans by insiders to minimize the risk of SEC investigations and very...

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