NewStream Energy Technologies Group Inc (NSGP)

[trader53]

On the subject of "Planned Sales"

http://blog.form4oracle.com/2009/09/29/10b5-1-plan-planned-insider-purchases-and-sales/


Insiders can adopt a 10b5-1 trading plan.

The SEC adopted Rule10b5-1 to protect executives from charges of insider trading by allowing them to legally buy or sell shares in their company even if they are aware of material non-public information so long as the trade was specifically laid out in a plan before the executive became aware of the information. A 10b5-1 plan needs to predetermine the number of shares to be traded, at what price and on what date.

Planned sales (or purchases) are not binding and insiders can cancel them for any reason, even if they have non-public material knowledge.


So what can you make of it if you see some insider purchases or sales marked as “planned”?

You can view these transactions as carrying a lot less informational value, since there is no element of spontaneity in them and either assign them no value or significantly discount their significance.