It is being reported that the CEO had regular quarterly sales on set dates for a long period of time. That would negate liability.
That seens much more likely than a situation in which a financially sophisticated CEO would obviously commit criminal trading. He probably had the sale approved by his lawyers, the banks lawyers, and notified the SEC and OCC
The person I know who works at SVB said that everybody got an email today saying that theyâre all now employees of the new bank that the FDIC created. AND that theyâre going to be paid at their regular salary rate. Not the 1.5 times your salary amount that they were told last Friday.
However, thereâs new management now running the show.
Those are better facts, but they donât ânegate liabilityâ in and of themselves. The only things that negate liability is not doing it, or having done it pursuant to a good trading plan. If the sales were pursuant to a valid 10b5-1 plan, then he has an affirmative defense against a 10b-5 based cause of action. The key word is âvalidâ. One of the principal and obvious requirements for a good plan is that it be executed on a day on which he could otherwise have bought or sold stock. If he made any subsequent changes or amendments, itâs tantamount to entering into a new plan. If he exercised any subsequent influence over the trades, he doesnât have a good plan. Without a valid plan, even if the sales were scheduled on the back of his brokerâs napkin, heâs in the cross hairs and will have a world of stress ahead of him.
Iâm not going to spend time reading their filings, but this will eventually come down to what was âout thereâ in the public record, particularly their '34 Act reporting, which includes, among many other things, disclosure of known events or trends that are or could reasonably be expected to affect the bankâs business. In particular, the rule of thumb for liquidity disclosure in MD&A is a one-year look forward.
Given that he had 40 years in the industry, I think it is safe to assume both he and his lawyers knew that.
But you didnât, and youâre the one who said that his sales pattern would ânegate liability.â By itself, it doesnât, and I donât know a securities lawyer who would ever write those words.
As to what itâs safe to assume or not, Iâve been in this business long enough to know what assuming does for me. Youâre free to assume away.
There is a reason why the SEC has just run another overhaul of Rule 10b5-1 and a reason why the SEC has always hated their own safe harbor since they adopted it some 24 years ago: they are highly skeptical of corporate insiders. You might want to get to know Mr. Gensler a bit.
He was a class A director of the Fed in SF. One doesnt become one by being truly stupid and obviously insider trading.
The Enron folks were corrupt, but there was nothing blatantly obvious about what they were doing. Arthur Anderson didnt catch it. The CEO knew his sales would make headlines and he had criminal time at stake. I am sure he protected himself. As he was advised by his securities attorneys.
Too funny. Yes, I do know the requirements ( as a former securities attorney working IPOs),but did not feel compelled to lay it all out on a college chat-why would you assume that I didnt know, or would bother writing that much?
But he might not have anticipated jurors with a mind set of @Creekland 
The nice thing about having securities attorneys is they charge a whole lot but anticipate everything.
Look, Iâm not saying he did or did not do anything. You seem very comfortable that he didnât because of who he is, which is a line of reasoning I see from you a lot, and thatâs just fine. I promise it wonât stop an inquiry. The FINRA people are sharpening their pencils as I type.
I guarantee it.
Sophisticated people do stupid things all the time, particularly in this space. It can be a lot less black and white than you and I can understand here.
But dutifully filing a Form 4 and Form 144 and being an impressive person doesnât really tell you anything.
I was both joking and have a team of them at my disposal.
Because no securities lawyer would ever write that periodic sales would ânegate liability,â nor would they carry on with this reasoning that because the person was impressive they must bullet proof. The entire exercise will involve going back in time and piecing together who knew what and when, what was precisely disclosed and not disclosed, and then second guessing everybodyâs every move.
In addition to those exposed to regional banks, today was a tough day for Value!
Wait until the private class action plaintiffâs lawyers go after this. I do not doubt that they were already in full warp speed several days ago.
While I suppose their case(s) will be stayed pending the culmination of any criminal investigation, these folks do NOT let go of anything.
Already filed by the Rosen law firm
So youâre saying he pulled approx 3.6 billion dollars out of the bank quarterly? Interesting if so.
I think you meant 3.6M, not 3.5B.
3.6M quarterly seems like a pretty normal sale size for a CEO, maybe even a bit low. For comparison, Mark Benioffâs (CEO of Salesforce) last sale was 51M.
This headline @vpa2019 posted in post 161 (or close to it) is what I was going off of. I just clicked on it and theyâve revised it to be million instead of billion.
Editorâs note: A previous version of the story had mistakenly had $3.6B in headline, instead of $3.6M.
Million certainly doesnât raise as much of a flag for me, billion certainly did.
This seems to be a part of the $3.6M CEOâs transaction:
Looks like these options to buy stock at $105.18 were about to expire in May. The trading plan was set up in January.
Both good and bad. When CEOs sell stock, the market pays attention and raises a brow. Exercising an option about to expire is more well understood and accepted. But expiring options also make people more aggressive. When it expires, itâs gone and thatâs that.
The most pressure Iâve faced when senior people wanted to sell at a time I didnât think they should involved expiring in-the-money options. Itâs hard to watch an option expire, especially when you know you had 10 years in which to exercise it and (often) didnât because you got too greedy in holding out for a bigger spread.