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Morrison & Foerster, New York The Enforcement Division of the Securities and Exchange Commission has indicated that it expects to focus closely on the use and operation of 10b5-1 plans.
The SEC adopted Rule 10b5-1 in 2000 to “clarify and strengthen” insider trading laws. Rule 10b5-1 establishes that trading by an insider while they are aware of material non-public information will give rise to insider trading liability – abolishing the distinction that had previously been argued in insider trading cases between use and possession of inside information.
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