SEC Chair Gary Gensler wants stronger insider trading rules as insider securities sales hit records. Chairman Gensler proposed a 120-day cooling-off period for company officers and directors wishing to change their portfolio management plans.
AMC lost as much as 20% on Friday amid insider sales and lost about 70% from its recent high of 72.62 in June, 2021. AMC’s CEO Adam Aaron sold $9.6 million worth of stock on December 7, while its CFO sold the last of his shares. CEOs and corporate leaders including Microsoft’s Satya Nadella, Amazon founder Jeff Bezos and Tesla’s Elon Musk sold a record $69 billion in stock in 2021. According to InsiderScore/Verity, insider sales were up 30% from 2020 and up 79% against a 10-year average as of Nov, 2021.
Gensler wants the SEC to consider implimenting a 120-day cooling-off period for company executives for any new or changed portfolio plan. A similar amendment would enact a 30-day cooling period for companies to trade their own stock.
“The core issue is that these insiders regularly have material information that the public doesn’t have. So how can they sell and buy stock in a way that’s fair to the marketplace?” Gensler noted.