Full question:
Florida Law...can a partner of a corporation sell his shares knowing that there is a pending lawsuit to dissolve that corporation?
- Category: Corporations
- Subcategory: Stock
- Date:
- State: Florida
Answer:
The answer depends on al lthe circumstances involved, such as whether there was a breach of fiduciary duty, whether the stock was sold under a pre-existing plan, contract, or instruction that was made in good faith, etc. When corporate insiders trade in their own securities, they must report their trades to the authorities. Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security.
Insider trading is commonly referred to as the use of confidential information about a business gained through employment in a company or a stock brokerage, to buy and/or sell stocks and bonds based on the private knowledge that the value will go up or down. It is a crime under the Securities and Exchange Act. However, the term actually includes both legal and illegal conduct. The legal version is when corporate insiders—officers, directors, and employees—buy and sell stock in their own companies. When corporate insiders trade in their own securities, they must report their trades to the SEC.
For further discussion, please see:
http://www.sec.gov/answers/insider.htm
http://www.law.uc.edu/CCL/34ActRls/rule10b5-1.html
http://www.law.uc.edu/CCL/34Act/sec16.html
http://www.seclaw.com/docs/insidertrading033104.htm
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
