Any financial advisor???

Question

Does anyone know anything about a 10B5-1 plan? I am a financial advisor, but I can not find a lot of information on this type of plan, and my compliance department tells me “about” the plan and how to open it. Does anyone have experience with a 10B5-1 plan for insider trading?

From what I know about the plan, it is for corporate executive that are deemed "insider" and they will be able to trade there companies stock, with out a 144 file. 10B5-1 is just the SEC code. It is not a common plan, but I have a business owner that has a lot of his own companies stock, and he wants tax advantages, and the ability to sell whenever he wants. "insider" is not a illegal, it is just someone that "knows inside information" that is not public. They can own the stock, but they are restricted to how they sell. This is not for a trade "right now" but I would always like to have a plan to hedge, if something suddenly changes....like the 2000 bubble...NOTHING illegal

Answer 1

I've not used it, but here's a few articles/links that might help.

http://www.adamsharkness.com/files_and_pdfs/Rule10b5-1(portrait).pdf

http://www.wiseradvisor.com/university-article~artId~151~title~new-10b5-1-plan-helps-solve-executives-diversification-problems.asp

http://www.mofo.com/news/updates/bulletins/bulletin02013.html

http://www.williamblair.com/pages/10b51.asp

http://www.law.uc.edu/CCL/34ActRls/rule10b5-1.html

http://lawprofessors.typepad.com/business_law/2006/11/rule_10b51_plan.html

http://www.jonesday.com/pubs/pubs_detail.aspx?pubID=S4252

Hope that helps!

Answer 2

I am a former FA, but I have no clue what the 10B5-1 plan is. However, since your question ends with, "...plan for insider trading", it's probably not a legal type of plan!