Replies to post #92258 on Biotech Values

[DewDiligence]

The distinction between hard and soft 10b5-1 plans is not meaningful, IMO, and no one other than BSR_David even uses these terms, as far as I can tell. From a practical standpoint, I think all 10b5-1 plans ought to be considered “soft” insofar as they afford ample loopholes to game the system.

[AlpineBV_Miller]

Who had the discretion in the soft plans you saw? The executive or an "independent" third party?

Great question. This is why I don't understand why they are legal. The executive has the option. They certainly don't conform to the spirit of the law as I understand it. More importantly, when a company says, "Oh, it was a predetermined 10b-5 sale" to excuse selling they may or may not be completely accurate.

If it is a "hard" sale plan, OK. If it is a "soft" sale plan, well...

Execs have a right to sell shares. That's why we as shareholders approve shareholder plans. But shareholders have a right to understand precisely under what conditions those shares are sold. I believe the current 10b-5 program enforcement allowance for soft sales actually interferes with this shareholder right and leaves us worse off than if the rule was never made in the first place.