The U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler recently announced that his agency is working on a proposal to revise Rule 10b5-1, a regulation that allows corporate insiders to adopt trading plans to buy and sell shares of their companies. We've prepared this report to help you understand why.
For nearly two decades, InsiderScore has collected and analyzed all insider transactions, including 10b5-1 plan activity, to identify and flag actionable investment insights for the institutional investor community. Our more than 300 institutional investor clients rely on this data because they understand 10b5-1 plan selling should not be disregarded simply because it’s “pre-planned” and that certain behaviors can send valuation-related signals to the market.
With Rule 10b5-1 and insiders' use of 10b5-1 plans in the spotlight, we have prepared this report to provide a review of Rule 10b5-1, an overview of common 10b5-1 selling behaviors, recent case studies exploring such behaviors, and information on how InsiderScore can help investors.
Recent market wide 10b5-1 plan usage trends, highlighting the technology and healthcare sectors, where plan selling accounts for roughly 70 percent of all sales.
Review of the origins of Rule 10b5-1 and the insider buying and selling behaviors the rule was intended to permit and prevent.
Overview of InsiderScore's database, software, and analyst review process that extracts plan details from form fields and footnotes to surface valuation-related insights from insider activity.
A comprehensive list 10b5-1 plan selling activities that should be viewed as potential red flag behaviors, indicating opportunistic usage of 10b5-1 plans.
A series of case studies of recent insider transactions that triggered InsiderScore's proprietary alerts as being highly likely to be sending strong valuation-related signals.
About MackeyRMS and InsiderScore
MackeyRMS and InsiderScore give the world’s leading investment managers a faster way to find and share vital investment insights.