A recent DOJ/SEC-prompted insider trading case against a former CEO and board chair and summarized in this Dorsey & Whitney memo illustrates the limits of an otherwise valid Rule 10b5-1 plan. The defendant, who entered into two Rule 10b5-1 plans while in possession of material nonpublic information (“MNPI”) and promptly sold company securities before a dramatic drop in the stock price triggered by the release of the MNPI was convicted by a federal jury in Los Angeles of one count of securities fraud and two counts of insider trading.