Tag Archives: risk management

Rule 10b5-1 Plan Disclosure: Litigation Risk and Trading Benefit

In October 2000, the SEC promulgated Rule 10b5-1 to provide company insiders with a way to trade their shares in company stock without incurring securities law liability, through the pre-trading adoption of a written trading plan. Despite the Rule’s protective purpose, concerns have arisen more recently about Rule 10b5-1 plan abuses, as I noted in … Continue Reading

Of Rogue Traders, Risk Management, and Securities Litigation

You will never read a headline that says “Financial Institution Fires Rogue Trader Who Racked Up Massive Gains.” Therein lies the fundamental tension in financial institution risk management. It is not a merely cynical view that financial institutions tacitly tolerate control lapses as long as gains result – indeed, some of the leading commentators place the blame for … Continue Reading
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