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The two preceding posts in this series (1) began to address the question whether a CEO’s adoption of a Rule 10b5-1 trading Plan should be publicly disclosed by the CEO or the company, such as through a press release or a Form 8-K, before any trading begins under the Plan, and (2) described reasons for not so disclosing the adoption of a Plan , which appears to be the prevailing practice notwithstanding recommendations to disclose in a number of articles by knowledgeable securities lawyers.
So what are some of the reasons that the CEO or the company should disclose the adoption of the Plan? Assuming (as is typical) that the Plan contemplates sales of shares by the CEO, I believe they include the following:
(In either event, the less unfavorable the reactions of the shareholders and the market are, the less selling would occur and the less the market price of the shares would decrease – which would benefit the CEO not only in his sales, but also in the value of the shares he retains.)
Although the reasons for separate disclosures of the adoption of a Plan before any trading begins under the Plan may appear to be fewer than the reasons not to disclose, the first two reasons for disclosure described in this post appear to be the most significant. In brief, disclosure is consistent with the key purpose of the Plan – to provide a defense against Rule 10b-5 claims. Nevertheless, there may not be a single, uniformly applicable answer to the question whether to publicly disclose the adoption of a Plan before any trading begins under the Plan. The answer may well depend on the circumstances and the CEO’s and the company’s evaluation of the reasons for and against such disclosure.
 See, e.g., In re Synchronoss Securities Litigation, 705 F. Supp. 2d 367, 410 (D. N.J. 2010) https://www.courtlistener.com/njd/cK8s/in-re-synchronoss-securities-litigation/; Wietschner v. Monterey Pasta Co., 294 F. Supp. 2d 1102, 1117 (N.D. Cal. 2003) http://scholar.google.com/scholar_case?case=11005429741317211534&q=Wietschner+v.+Monterey+Pasta&hl=en&as_sdt=6,44&as_vis=1.
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