Recently, newly appointed SEC Chairman Mary Jo White received a letter from the Council of Institutional of Investors reiterating the Council's concerns regarding stock trading abuses by executives that have adopted 10b5-1 stock trading plans. The plans give executives an affirmative defense against allegations of insider trading, but they do not completely insulate executives from insider trading violations. As with the letter the Council sent to then-chairman Elisse Walter in December, it requested that the SEC engage in rulemaking that would:
- Prevent the adoption of Rule 10b5-1 trading plans outside of otherwise approved company-adopted trading windows;
- Prevent the adoption of multiple, overlapping Rule 10b5-1 plans;
- Require a waiting period of at least three months between the adoption of a Rule 10b5-1 plan and the execution of the first trade pursuant to the plan;
- Implement limitations to the frequency of modifications or cancellations of Rule 10b5-1 plans.