January 26, 2022
Although studies show that abusive trading under 10b5-1 plans occurs, which certainly should be be prevented, insofar as practicable, the quarterly reporting requirements are unnecessary, excessively burdensome, and likely unworkable, requiring the issuer to canvass its directors and officers for each reporting period.
Although I appreciate the Commission's goal of leveling the trading field, I'm doubtful that such disclosure would significantly affect investment decisions.
Moreover, the reporting obligation would shift the liability for abuses by an officer or director to the deep-pocket registrant and its insurance carriers, diffusing focus on the wrongdoer--more likely encouraging than discouraging the behavior intended to be deterred.
It seems to me that a cooling-off period should make successful abuse use of Rule 10b5-1 more difficult and that the good faith requirement, akin to the non-circumvention provisions of many other SEC rules, would defeat the 10b5-1 affirmative defense. I don't see why much more is necessary.