Insider Trading Memorandum

Summary

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, Insider Trading Compliance Policy, Insider Trading Policy Template, and Securities Law Techniques FORM 80A. For information on drafting an insider trading policy, see Insider Trading Policies, Insider Trading: Liability and Compliance § 13.06, and Ferrara on Insider Trading and The Wall § 6.01. For a full listing of key content covering management of in-house legal departments, see In-House Legal Department Management Resource Kit. For a full listing of key content for in-house counsel and corporate secretaries when performing corporate functions, see In-House Corporate Secretary Resource Kit.