Daugherty Quoted in The Progressive Investor About SEC Rules Governing Sprecher, Loeffler Charges of Insider Trading

24 November 2020 The Progressive Investor News

Partner Patrick Daugherty was quoted in The Progressive Investor article, “NYSE Chairman’s Role In Insider Trading Scheme Gets Muddier,” about why the insider trading case against Jeff Sprecher and his wife, U.S. Senator Kelly Loeffler, were dismissed under an SEC Rule. The couple claimed that the stock sales in question were part of an SEC 10b5-1 plan, and that they had no personal involvement in the actual individual trading decisions.

Daugherty told The Progressive Investor that the SEC Rule says that “if you are a corporate insider, you can enter into a plan that will allow for shares to be sold at stated intervals in dollar amounts, according to an algorithm with the trades done in a certain way.  This means the corporate executive takes themselves out of making the actual timing decisions about when to buy or sell.  They give control to an outside advisor or brokerage firm that is not communicating with them.”

“If you do it the right way, the trades can get done even when the executive is in charge of material non-public information, so they can say the buy or sell plan was set up in advance and did not rely on any trading information that was provided by the executive,” Daugherty said.