As I noted at the time, earlier this year SEC Chair Gary Gensler spoke publicly about the need for revisions to Rule 10b5-1, the regulatory provision that allows corporate executives, subject to certain requirements, to trade in their holdings of their companies’ securities. Rule 10b5-1 has long been criticized because of perceived abuses. On December 15, 2021, the SEC released proposed revisions to the Rule. Among other things, the proposed revisions strengthen the requirements to access the affirmative defenses afforded under the Rule, and also enhance disclosure requirements for companies whose executives enter into trading plans pursuant to the Rule. The proposed changes are subject to a 45-day comment period after the proposed amendments are published in the Federal Register.
Continue Reading SEC Proposes Amendments to Rule 10b5-1 Trading Plan Provisions
Affirmative Defenses
Eleventh Circuit Rejects FDIC’s “No Duty” Argument, Allows Post-Receivership Affirmative Defenses Against the Agency
One of the most contentious issues in the litigation the FDIC has been pursuing in its capacity as receiver of various failed banks is whether the defendant former directors and officers can assert affirmative defenses against the FDIC for the agency’s own conduct.
In a part of a December 23, 2013 Eleventh Circuit opinion…
Failed Bank Directors’ and Officers’ Affirmative Defenses Against the FDIC Stricken
In order to try to defend themselves from claims asserted against them by the FDIC as receiver for a failed bank, the failed bank’s directors and officers often raise affirmative defenses, either based on pre-receivership conduct (as for example, in connection with pre-failure examinations) or post-receivership conduct (as for example in connection with the agency’s…
Former IndyMac Officers Cannot Rely on Business Judgment Rule as Defense in FDIC Failed Bank Lawsuit
On October 5, 2012, in the latest in a series of decisions addressing the question whether or not corporate officers (as differentiated from corporate directors) are entitled under California law to rely on the protections of the business judgment rule, Central District of California Judge Dale Fischer held that former officers of the failed IndyMac…