Insider activity can help identify takeover candidates

Article Abstract:

Insider activity or inaction can be used to identify potential corporate acquisitions. The absence of insider activity in a company where insider trading is normally active may mean that the firm is being considered for acquisition. However, employees of target firms who participate in takeover negotiations violate SEC Rule 10b-5 if they are found insider trading using information based on the negotiations. Corporate insiders, who postpone the sale of securities until an acquisition is completed, is not liable as long as the decision to trade was not influenced by material, nonpublic information regarding the takeover bid.

Investor Protection & Disclosure, Analysis, Acquisitions and mergers, Disclosure (Securities law), Investor relations

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Insider distribution activity increased in August

Article Abstract:

Executives had increased their holdings after the market decline in Jul. 1996 as expected. Insiders, believing that the shares in their respective firms were undervalued and taking advantage of the discounted share prices, accumulated holdings in the chemical, energy, furniture and restaurant sectors. Insider distribution activity has increased, particularly at technology-related firms such as Netscape, Peoplesoft, Premisys Communications and Informix.

Stocks, Reports

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Look for an expansion of restricted stock sales down the road

Article Abstract:

The SEC requires insider stockholders who possess restricted stocks to hold them for about two years after their companies have gone public. However, many stockholders are petitioning for a reduction in the required holding period to about one year. If the SEC grants the petition, restricted stock sales are expected to intensify as insider stockholders try to capitalize on their companies' initial public offerings.

Trading Regulations, Securities law, Employee stock options, Securities trading

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