SEC Rule 10b5-1 is an important provision in insider trading regulation allowing insiders to trade securities over time without running afoul of prohibitions against trading when they’re aware of material non-public information (MNPI). Insiders can set up these pre-arranged trading plans with a broker or other outside agent at a time when they do not possess MNPI as an affirmative defense against allegations of insider trading. This allows insiders to have periodic trades made on their behalf, as long as the trades are made in their name by an independent party.
Even if you’re not an insider, you can still utilize our 10b5-1 plan database to your advantage.
As an investor, its important to keep a close eye on insider trading to watch for interesting investment signals. For example, the CEO of a company you hold selling most of their stock would normally be a big negative signal. Most insider trading data services would report that trade as a red flag, but The Washington Service checks every trade to see if it was made pursuant to a 10b5-1 plan. The large trade could actually be the CEO seeking compensation, rather than an indictment on the company’s future share price.
As a broker working for clients that may be executives at public companies, its important to note how insiders utilize 10b5-1 plans set up by their brokers to achieve their goals. EZ-Insider makes it easy to identify how insiders use 10b5-1 plans to liquidate their holdings without disrupting the market, and gives brokers the ability to compare their client’s plans against similar individuals at other companies. We also make it easy to compile 10b5-1 plan information for marketing purposes.
The Washington Service tracks insider’s adoption of 10b5-1 plans and transactions made under such plans, and has one of the most comprehensive databases of active and expired 10b5-1 plans. In addition to flagging trades that are pursuant to a pre-arranged 10b5-1 plan, subscribers to our 10b5-1 Plan Explorer will have the ability to search new plans and plans by company, industry, or broker. The Washington Service also writes daily news stories disclosing newly adopted plans, amendments, and plan terminations so you can follow 10b5-1 news at companies of interest. See our product page for further details.
Our 10b5-1 data stands apart from all other sources in both accuracy and scope. While other data sources may present each filing as-is, the Washington Service utilizes human review and machine learning to correct trades erroneously marked as un-planned or pursuant to the wrong plan. Our analysts look at a wide universe of SEC filings to identify 10b5-1 plans that otherwise might slip through the cracks. Our proprietary system combines data from Form 4s, Form 144s, and other EDGAR filings to create the most complete look at 10b5-1 plans. We go the extra mile to gather hard-to-collect plan dates and proposed plan information from filings under related entities/trusts, free text, and paper filings.
We’re able to create customized datasets and reports. Contact us today and see how we can improve your workflow.