| The SEC underscored its scrutiny of Rule 10b5-1 trading plans with the recent announcement of settled insider trading and other charges against the CEO and former President and CTO of Cheetah Mobile for sales conducted through such a plan.
In December 2021, the SEC proposed amendments to Rule 10b5-1,1 which provides an affirmative defense to insider trading liability for trades made in accordance with the rule’s requirements. One of the requirements is that when the person adopts a trading plan, they must not be aware of material, nonpublic information about the securities to be purchased or sold pursuant to the plan.
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