InterDigital Inc (IDCC)

[olddog967]

dndodd/ Wireless: As I have said before you really have to be a securities lawyer to understand all the ramifications of SEC rules. The citation you have is for Rule 10b-18 which provides a safe harbor from potential liability for stock price manipulation; however, companies doing stock buybacks are also covered by Rule 10b5-1 which contains the SEC’s definition for determining trading “on the basis of” material public information in insider trading cases..

The following is from an article which discusses both aspects:


While Rule 10b-18 provides a safe harbor against stock repurchase programs being viewed as manipulative, it does not insulate repurchases from insider trading liability.  Section 10(b) of the Exchange Act and Rule 10b-5 prohibit material misstatements or material omissions of fact in connection with the purchase or sale of any security.  Issuers and affiliates are generally deemed to have an affirmative duty under Section 10(b) and Rule 10b-5 to disclose all material nonpublic information concerning the issuer when trading in the issuer’s securities.  Section 10(b) and Rule 10b-5 may impose liability on issuers and affiliates engaged in a repurchase program at a time when there exists material nonpublic information of a favorable nature concerning the issuer.

http://www.dorsey.com/publications/legal_detail.aspx?FlashNavID=pubs_legal&pubid=123659603