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Kelly Reinholdtsen advises both public and private companies on the design and operation of equity-based arrangements, including compliance with federal and state securities laws, Section 16 and Rule 144.

Not too many choices exist in the technical world of Form 4 reporting. But there is a choice to be made for reporting grants of stock-settled, time-based restricted stock units (RSUs). For Section 16 nerds like me, this is as thrilling as it gets.

These grants can be reported on a Form 4 in either

Unless you’re a diehard Section 16 fan, you might not realize that reporting securities as “indirectly owned through others” is not a binding admission of beneficial ownership. That can be a tough concept to grasp. It doesn’t seem real sometimes.

Although not common, there certainly are situations where the extent of an insider’s beneficial ownership

I’m into footnotes for Section 16 reports. They help provide clarity and eliminate confusion. They help companies look like they’re not hiding the ball. And allow shareholders to understand details of a transaction that might not be evident just from the disclosures in the tables.

A good example is using footnotes liberally to denote that an insider’s transaction occurred pursuant to a Rule 10b5-1 plan. An insider’s reputation can take a big hit if a reporter “unearths” a trade that makes it seem like the insider exercised discretion at a time they knew something nonpublic.
Continue Reading Yeah, I’ve Got a Footnote Philosophy for Form 4s

SEC Chair Gary Gensler gave a speech yesterday in which he talked about his request to the Staff that they make recommendations to the Commissioners regarding “freshening up” Rule 10b5-1. Gensler enumerated several “loopholes” in current Rule 10b5-1: no required cooling-off period before trades can be made under plans; no limitations on cancelling 10b5-1 plans