The DOJ and the SEC show continued interest in investigating insider trading by company executives who possess material non-public information. Though a Rule 10b5-1 plan is intended as a safe harbor, the existence of any such plan cannot be an affirmative defense.
A Rule 10b5-1 plan is intended to satisfy affirmative defense provided in Rule 10b5-1c, rule that provides affirmative defense to allegation of having traded on basis of material nonpublic information. What is non-Rule 10b5-1 trading arrangement?
The SEC adopted amendments to modernize Rule 10b5 1 under the Securities Exchange Act and added new disclosure requirements to enhance investor protections against insider trading. One of the amendments adopted by SEC is a cooling off period before trading can commence.