Do SEC's 10b5-1 Safe Harbor Rules Need to Be Rewritten?

51 Pages Posted: 14 Oct 2015 Last revised: 17 Jun 2016

See all articles by Taylan Mavruk

Taylan Mavruk

University of Gothenburg - Centre for Finance - School of Business, Economics and Law

H. Nejat Seyhun

University of Michigan, Stephen M. Ross School of Business

Date Written: June 16, 2016

Abstract

We examine the profitability of insider trading under SEC Rule 10b5-1 plans. The plans do work to prevent some informed trading. However, on average, insider trading under the safe harbor plans appears to be motivated by material non-public information. We propose some policy changes to tighten the rule and enable separation of informed and uninformed insider trading.

Keywords: Insider trading, Safe Harbor, Securities and Exchange Commission Rule 10b5-1, Information Access

JEL Classification: K22, M52

Suggested Citation

Mavruk, Taylan and Seyhun, H. Nejat, Do SEC's 10b5-1 Safe Harbor Rules Need to Be Rewritten? (June 16, 2016). Columbia Business Law Review, 133-183, 2016, Available at SSRN: https://ssrn.com/abstract=2673128

Taylan Mavruk

University of Gothenburg - Centre for Finance - School of Business, Economics and Law ( email )

Vasagatan 1
Gothenburg, 40530
Sweden

HOME PAGE: http://www.cff.handels.gu.se/faculty-presentation/taylan-mavruk/

H. Nejat Seyhun (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-763-5463 (Phone)

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