Further to last week's report: "Stock Buybacks: SEC Enforcement Action Takeaways," based on a review and analysis of the SEC's enforcement action, Foley's "Determining Existence of Material Non-Public Information" identifies critical aspects of an effective process to evaluate whether a company is in possession of material non-public information such that it should not proceed with a stock buyback transaction. The publication also suggests key factors relevant to a determination of whether the probability of an acquisition or other business combination constitutes material non-public information. Importantly, as noted in the SEC's order (FN2) (referencing Basic, Inc. v. Levinson), "an acquisition need not be more-likely-than-not to occur to be material."
Access additional resources on our SEC Enforcement and Insider Trading/Section 16 pages. This post first appeared in the weekly Society Alert!