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Three US senators cite research by Professor Alan Jagolinzer of Cambridge Judge Business School in urging SEC reform of insider trading laws. 

Woman tracking and trading stocks using laptop and desktop computer. Stock Exchange, investment, and financial trading concept.
Professor Alan Jagolinzer

Three US senators cited research co-authored by Professor Alan Jagolinzer of Cambridge Judge Business School in urging the Securities and Exchange Commission to review and consider reforming a rule on insider trading by corporate executives.

The so-called 10b5-1 rule enacted in 2000 is designed to allow executives to sell holdings without engaging in insider trading, but the research found that these plans can be misused as shown by recent stock sales by executives at pharmaceutical companies Pfizer and Moderna, which have both developed COVID-19 vaccines.

“These abuses, and the plans’ lack of transparency, damage investors and risk undermining public confidence,” wrote Senators Elizabeth Warren (D-Mass.), Sherrod Brown (D-Ohio), and Chris Van Hollen (D-Md.), all members of the Senate Committee on Banking, Housing, and Urban Affairs.

The senators’ 12 February letter to Acting SEC Chair Allison Herren Lee called on the agency to “to re-examine its policies regarding 10b5-1 plans to improve transparency, enforcement, and incentives, to ensure that these plans increase fairness and trust.”