The Securities and Exchange Commission (SEC) is a U.S. federal agency that enforces the securities laws. The agency is in charge of three programs: the enforcement of securities laws, the regulation of securities markets, and the oversight of brokerage firms.
Unregulated stock trading has led to a massive loophole that allows companies to lavish bonuses and payoffs on their executives, while allowing them to avoid paying taxes. In the last five years, the S&P 500 has been hit by a number of high-profile executive scandals, but none as egregious as the one that occurred at WorldCom, a company that was associated with the word “fraud” until its collapse in 2002. The executive responsible, the company’s former CEO Bernie Ebbers, was sentenced to 25 years in prison.
The Securities and Exchange Commission’s chairwoman Mary Jo White has been calling for reforms to the shady “stock-trading plans,” which were used by CEOs to secretly buy and sell stock in their company shares.. Read more about sec head and let us know what you think.The U.S. Securities and Exchange Commission (SEC) is working on a proposal that would impose restrictions on the plans of company insiders who want to avoid insider trading charges when they buy or sell shares of their own company. In a speech at an event hosted Monday by the Wall Street Journal CFO Network, SEC Chairman said Gary Gensler. said it would review the rules for these agreements, known as 10b5-1 plans. Insiders make plans in advance and use them to plan future business. This agreement provides executives with protection against insider trading claims that may arise from the non-disclosure of material non-public information at the time of the transaction. These plans are often controversial because the plan does not have to be made public at the time it is prepared by the insider. Some investors say the plans could be manipulated because z. B. Administrators may modify or delete them. Listed companies sometimes disclose these plans to reduce the perception that executives are peddling non-public information. In 2000, the SEC adopted a rule to implement 10b5-1 plans. Agency officials knew the weaknesses of its structure, the former SEC commissioner said. Joseph Grundfest said in 2013, but the agency did not specify the rule.
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The Morning Herald offers daily corporate finance news and analysis from the CFO Journal team. Sir, I want to thank you for your support. Gensler proposed a rule change Monday. In my opinion, these plans have caused real cracks in our insider trading system, he said. He added that regulators will ensure that abuse of 10b5-1 plans under the current rule is detected and punished. The SEC’s proposal could seek to reduce the risk of unauthorized trading by requiring insiders to wait four to six months after a plan is introduced before trading; imposing restrictions on the cancellation or modification of plans; making the adoption and any modifications of plans public; and limiting the number of plans executives can create. Insiders can cancel a plan if they have important non-public information, Gensler said. It seems to me that everything is backwards. It could also undermine investor confidence. In 2012 and 2013, the Council of Institutional Investors urged the SEC to restrict 10b5-1 plans because they were vulnerable to abuse. At that time, the SEC did not revise the rule that allowed these plans. Trading apps may be subject to regulation in the future, SEC Chairman Gary Gensler told Gene Eaglesham of the WSJ at a CFO Network event. Gensler also discussed changes to the Public Company Accounting Oversight Board, the body that oversees auditors of public companies. Last week, the SEC fired the chairman of the PCAOB, Wilhelm Dunke, Nominated by a Republican in 2017. Two Republican SEC commissioners have criticized the move. In Mr. Gensler’s opinion, the PCAOB failed in its role and mission as a standard setter and enforcer. I supported the idea of refocusing and revitalizing this important organization, he said. Gensler also said the SEC is developing new rules or guidelines for special acquisition companies, a deal structure that has taken off in the past year as an alternative to a traditional IPO. Gensler questioned whether SPACs, which have raised more than $100 billion this year, are appropriate for retail investors, who may not understand their complex structure and conflicts of interest. Gensler, a Democrat appointee, was appointed to head the SEC in April. During the Obama administration, he was chairman of the SEC’s sister agency, the Commodity Futures Trading Commission. At the CFTC, he introduced rules to reduce risk and increase transparency in the swap market after unregulated trading contributed to the 2008 financial crisis. Under Gensler’s leadership, the CFTC introduced most standardized swap transactions to the exchanges and required them to be collateralized by clearinghouses. E-mail Dave Michaels at [email protected] and Mark Maurer at [email protected] Copyright ©2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8In a speech today at the University of Nebraska-Lincoln, SEC Chairman Mary Jo White called for stricter rules on executive stock trading plans. The Chairman pushed for rules that would limit the trading of stocks by executive officers. In the financial crisis of 2007-2008, many executives were found to have traded stocks before the markets crashed, resulting in heavy losses.. Read more about sec investigation amc and let us know what you think.
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