TheCorporateCounsel.net

On Friday, the SEC announced that it had filed a joint stipulation to dismiss, with prejudice, claims against Terren Peizer, which were premised on alleged misuse of a Rule 10b5-1 trading plan. In a parallel DOJ case, the defendant had been sentenced last year to 42 months in prison and $17.9 million in fines and forfeitures – but he was later pardoned by the President.

The case was unique because it took issue with the lack of a significant “cooling off” period between the time the former executive entered into the Rule 10b5-1 plan and the first transaction under the plan. As we’ve noted in our past commentary, it would be unlikely for this fact pattern to recur now that Rule 10b5-1 requires a 90-day “cooling off” period for directors and officers. The Commission stated in the joint stipulation and its related announcement that its decision to dismiss this civil action does not necessarily reflect the Commission’s positions in any other case.

– Liz Dunshee