Insider Trading Memorandum

This form provides a summary memorandum to be delivered to a company's board of directors and senior management discussing the prohibitions against insider trading under the federal securities laws. This form memorandum briefly discusses what constitutes insider trading, the affirmative defense against insider trading liability provided by Rule 10b5-1 (17 C.F.R. § 240.10b5-1) under the Securities Exchange Act of 1934, as amended, and the potential consequences of engaging in insider trading, both to the persons involved and the company. This template includes practical guidance and drafting notes. This memorandum may be delivered together with a draft of a company's insider trading policy. For examples of insider trading policies, see Insider Trading Policy, Securities Fraud and Insider Trading Policy, and Insider Trading Policy Template. For information on drafting an insider trading policy, see Insider Trading Policies.