Len Boselovic’s Heard Off the Street: Insider Trading Plans a Bit too Loose, Critics Say

November 9, 2014 – In The News
Pittsburgh Post-Gazette

Ernest Badway was quoted in the Pittsburgh Post-Gazette article, “Len Boselovic's Heard Off the Street: Insider Trading Plans a Bit too Loose, Critics Say.” Full text can be found in the November 9, 2014, issue, but a synopsis is below.

Under 10b5-1 insiders can establish a plan for selling a set amount of shares over a certain time period within certain price limits. When the plan is established, the shares are turned over to a broker or investment adviser who follows the instructions of the plan so the insider has a defense against charges of insider trading.

Issues with the plans entail the fact that insiders generally do not disclose when they file the plans or the terms. Also, insiders can amend or terminate plans.

“The SEC hates them,” said Fox attorney Ernest Badway. “They just see it as a recipe for insider trading.” Badway advises that clients who adopt the plans should not amend or cancel them.