Wednesday, October 14, 2015 1:53:25 AM
As long as a company's financial statements are current with regulators, the company usually isn't legally obligated to impose a blackout period, which is a period when corporate insiders are not allowed to buy or sell the company's stock.
Blackout periods are set by company policy, so there is no hard and fast rule, but it often covers the period from a few days prior to the end of the fiscal quarter through a day or two after the quarterly earnings announcement. It's meant to prevent corporate insiders from unfairly benefiting -- intentionally or inadvertently -- from trades in the stock market.
NHLD's fiscal year ended September 30th, and it has not released its fiscal year earnings.
However, last Friday and Monday, NHLD's CEO, Fagenson, and its new Executive Vice President of Finance, Worman, each purchased a couple thousand shares of NHLD stock during what would normally be considered a blackout period.
Why would Fagenson and Worman take the risk for so few shares?
http://www.sec.gov/Archives/edgar/data/1023844/000143774915018320/xslF345X03/rdgdoc.xml
http://www.sec.gov/Archives/edgar/data/1023844/000143774915018319/xslF345X03/rdgdoc.xml
If NHLD had a company policy specifying a blackout period, here is what could happen:
If a corporate official violates a company's blackout period, his future with the company could be in jeopardy. In 2012, two members of the board of directors at Green Mountain Coffee Roasters sold shares of the company during a blackout period. The officials sold shares because of a pre-existing broker agreement, but the transaction coincided with the blackout period. The executives lost some pay and they were removed from their posts and were shifted into less prominent roles on the board, according to a 2012 article in "The Wall Street Journal."
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