Walldog, I am temtpted to post the original Email from Dan Keeney to several I-Hub board members this morning. Perhaps I will and just edit our Balances real name.
Here is the Email from Dan Keeney with Balance's real name deleted:
I sent this to (BB) on Friday but he has apparently chosen to ignore it and continues posting messages that suggest ERHC’s board and management have CHOSEN not to purchase shares. The fact is that the blue portion of the note below comes directly from a communication with ERHC’s attorneys who have advised the company’s insiders not to purchase or sell shares until the many initiatives they are working on are behind them.
I noted your post and wanted to be responsive, especially considering that Director Howard Jeter specifically responded to the question of insider buying at the Annual Shareholders Meeting. The bottom line is that they have been advised that doing so could be illegal. Below is a communication that comes directly from the attorneys who were responding to a request from the directors regarding why they were being advised not to purchase shares during this period (the emphasis is not MINE it is the ATTORNEYS:
· Should directors or officers of ERHC purchase shares of ERHC common stock at this time?
No. ERHC's Insider Trading Policy provides that no director or officer may purchase or sell ERHC securities if such person has knowledge of non-public material information regarding ERHC. See Section F.2. of the Insider Trading Policy. Any information that a reasonable investor would consider important in deciding to purchase, sell or hold ERHC securities is considered material. See Section E of the Insider Trading Policy. Furthermore, information regarding financial results is often material information. See id. Likewise, Rule 10b-5 under the Securities Exchange Act of 1934 (the “Exchange Act”) prohibits a company’s directors and officers from purchasing or selling securities on the basis of material nonpublic information. Since (i) ERHC has not issued its earnings press release for the fiscal quarter ending March 31, 2008, (ii) ERHC's directors and officers would likely have knowledge of ERHC's non-public financial results and (iii) financial results are usually material information, it would be inadvisable for ERHC officers or directors to purchase or sell shares of ERHC common stock at this time. Notwithstanding the foregoing, ERHC may consider hardship and special circumstances on a case-by-case basis. If an officer or director of ERHC requests authorization to purchase or sell ERHC securities from ERHC's Chief Compliance Officer (or Chief Executive Officer) at any time during the period commencing after the end of the preceding fiscal quarter, but prior to the public release of ERHC’s financial results, the Chief Compliance Officer (or Chief Executive Officer) should seek the advice of its outside securities counsel prior to granting such authorization.
ERHC’s Insider Trading Policy does not set forth trading windows. Instead, it provides that an officer or director may purchase or sell ERHC securities commencing on the second business day after ERHC publicly discloses previously non-public material information (e.g., ERHC’s financial results for the second quarter), if such officer or director (x) does not have knowledge of any other material non-public information and (y) otherwise complies with the requirements of ERHC’s Insider Trading Policy, including obtaining the authorization of ERHC's Chief Compliance Officer or, in the absence of a Chief Compliance Officer, ERHC's Chief Executive Officer. See Sections F.2. and F.6. of the Insider Trading Policy.
However, even after ERHC issues its earnings press release for the preceding fiscal quarter, ERHC’s directors and officers need to be cognizant that they may not purchase or sell ERHC securities at any time at which they are in possession of material non-pubic information.
I hope you find this information helpful in explaining why ERHC’s directors do not purchase shares.
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