On the heels of a recent and rare SEC enforcement action for insufficient internal controls relating to approval of a corporate stock buyback (Rule 10b5-1) plan and the associated transaction and - more specifically - insufficient processes necessary to determine whether the company possessed material non-public information such that the transaction should not have been executed, Cleary's "SEC Internal Controls Case Demonstrates Agency’s Focus On MNPI Issues In The Stock Buyback Context" provides important guidance to companies on how to avoid or mitigate the potential for a similar fate.
See the SEC's release, "Avoiding Blowback from Your Stock Buyback" (Kirkland & Ellis), "Stock buybacks are about to get more complicated" (The New York Times), and additional information & resources on our SEC Enforcement, Insider Trading/Section 16, and Capital Allocation/Capital Structure pages. This post first appeared in the weekly Society Alert!