To my knowledge, insider trading is not associated

To my knowledge, insider trading is not associated with any required delay between the trades and pending news. Insiders are allowed to trade only on news that has already been made public.

For example, if the company stated in the CC that LymPro may be sold, then insiders may buy shares once that has been made public, even if there are negotiations in progress but the outcome is not known. But if an agreement had already been reached, insiders are prohibited against trading until this information is also made public. Between announcement of a possible sale and the actual closing of the deal (which had not yet been made public), insiders are allowed to trade shares, which would be reported on SEC Forms 3, 4, and 5.

There is no time restriction I can find in the regs that specifies the separation of the trade from new material news that is reported. The insiders who bought shares today clearly don't know what the final disposition of LymPro will be, but since it is clear the company could also go it alone regarding LymPro and not sell, now after the news of reaching the full recruitment for the LymPro extended study it seems like an excellent time to buy. Gerald did tweet today that insiders believe the company to be significantly undervalued at the current price. They are acting on those beliefs. Hoo-rah.

http://www.sec.gov/answers/insider.htm

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Insider Trading

"Insider trading" is a term that most investors have heard and usually associate with illegal conduct. But the term actually includes both legal and illegal conduct. The legal version is when corporate insiders—officers, directors, and employees—buy and sell stock in their own companies. When corporate insiders trade in their own securities, they must report their trades to the SEC. For more information about this type of insider trading and the reports insiders must file, please read "Forms 3, 4, 5" in our Fast Answers databank.

Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. Insider trading violations may also include "tipping" such information, securities trading by the person "tipped," and securities trading by those who misappropriate such information.

Examples of insider trading cases that have been brought by the SEC are cases against:

• Corporate officers, directors, and employees who traded the corporation's securities after learning of significant, confidential corporate developments;

• Friends, business associates, family members, and other "tippees" of such officers, directors, and employees, who traded the securities after receiving such information;

• Employees of law, banking, brokerage and printing firms who were given such information to provide services to the corporation whose securities they traded;

• Government employees who learned of such information because of their employment by the government; and

• Other persons who misappropriated, and took advantage of, confidential information from their employers.

Because insider trading undermines investor confidence in the fairness and integrity of the securities markets, the SEC has treated the detection and prosecution of insider trading violations as one of its enforcement priorities.

The SEC adopted new Rules 10b5-1 and 10b5-2 to resolve two insider trading issues where the courts have disagreed. Rule 10b5-1 provides that a person trades on the basis of material nonpublic information if a trader is "aware" of the material nonpublic information when making the purchase or sale. The rule also sets forth several affirmative defenses or exceptions to liability. The rule permits persons to trade in certain specified circumstances where it is clear that the information they are aware of is not a factor in the decision to trade, such as pursuant to a pre-existing plan, contract, or instruction that was made in good faith.

Rule 10b5-2 clarifies how the misappropriation theory applies to certain non-business relationships. This rule provides that a person receiving confidential information under circumstances specified in the rule would owe a duty of trust or confidence and thus could be liable under the misappropriation theory.

For more information about insider trading, please read Insider Trading—A U.S. Perspective , a speech by staff of the SEC.

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