Bloomberg Quotes Kerry Berchem on Possible SEC Move Against Corporate Executives’ Stock Trading Plans

Akin Gump corporate partner Kerry Berchem has been quoted in the Bloomberg article “SEC Is Warned Against Chilling Executives’ Stock Trading Plans.” The article looks at how the Securities and Exchange Commission (SEC) is being urged to take a cautious approach as it considers tightening rules that allow company stock sales by corporate executives without running afoul of insider trading laws.

While corporate executives regularly sell stock through scheduling plans they create under the SEC’s Rule 10b5-1, the article reports that SEC Chairman Gary Gensler said last week the Commission is considering ways to update the rule due to the potential for abuse. Bloomberg says Gensler spoke of the two decade-old regulation currently in place as creating possible loopholes for insider trading.

Berchem said a defined cooling-off period after establishing a 10b5-1 plan could shift the structure of executive compensation packages. Executives who would otherwise be heavily compensated with stock, particularly at small- and mid-cap companies, she said, are more likely to want larger cash compensation instead.

Berchem co-authored a recent blog post for Akin Gump’s AG Deal Diary about the SEC’s plans for Rule 10b5-1. Click here to read more.