A good read for IR: Employees, insider trading and their stock options

sellhighWow. Employees CAN act on non-public material information? Really? Seems so… “but,” “if” and “when” caveats do apply.

Published in the December’s New York Law Journal, Morrison & Foerster attorneys penned a very excellent client alert paper titled “Is Exercising Employee Stock Options Illegal Insider Trading? Maybe.”

Below is a snippet:

“Under the first two methods (the intra-company exercises), a holder ultimately should not be held liable for insider trading based on the exercise of the stock options, even if the holder exercised while aware of yet-to-be-announced market-moving news, whether positive or negative. Why? Because any material non-public information about the company typically is known by both parties to the option exercise transaction. An intra-company exercise occurs entirely between the holder and the company and does not involve a sale to the market.”

Download the full Morrison & Foerster alert here: http://www.mofo.com/files/Uploads/Images/131205-Is-Exercising-Employee-Stock-Options-Illegal-Insider-Trading.pdf

It often seem the SEC is ripe with of Fifty Shades of Maybe.  Share this with your GC.

Have a great day.

2 responses to “A good read for IR: Employees, insider trading and their stock options

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