The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Fri, 17 Jul 2026 11:32:25 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png The Best-Laid Plans of 10b5-1 – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 The Best-Laid Plans of 10b5-1 https://corpgov.law.harvard.edu/2013/02/06/the-best-laid-plans-of-10b5-1/?utm_source=rss&utm_medium=rss&utm_campaign=the-best-laid-plans-of-10b5-1 https://corpgov.law.harvard.edu/2013/02/06/the-best-laid-plans-of-10b5-1/#comments Wed, 06 Feb 2013 14:53:11 +0000 http://blogs.law.harvard.edu/corpgov/?p=39934?d=20150113111109EST Posted by Boris Feldman, Wilson Sonsini Goodrich & Rosati, on Wednesday, February 6, 2013
Editor's Note:

Boris Feldman is a member of Wilson Sonsini Goodrich & Rosati, P.C. The views expressed in this post are those of Mr. Feldman and do not reflect those of his firm or clients.

In the world of insider trading, Rule 10b5-1 plans are a blessing and a curse: a blessing, because they enable executives to diversify their company holdings in a stable, law-abiding manner; a curse, because they tempt cheaters into hiding their malfeasance in a cloak of invisibility.

For years, 10b5-1 plans received little scrutiny. In private shareholder lawsuits, plaintiffs’ lawyers generally scrunched their eyes shut and tried to ignore them. The SEC, having created the structure, lost interest postpartum. As a result, aggressive insiders sometimes were able to use the plans in ways the framers never intended.

Recently, journalists have started to focus on the specifics of 10b5-1 plans, along with perceived abuses of them. [1] Those articles appear to have roused the SEC. So this may be a good time for counsel, both inside and outside, to revisit their existing plans. In this post, I address what I consider to be best practices under 10b5-1. This does not mean that contrary practices are improper or unlawful. Think of it, rather, as 10b5-1 for the risk averse.

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