The Wall Street Journal: Regulator: Insiders Cashing Out On Buybacks

Corporate insiders are personally capitalizing on the recent boom in buyback announcements, vexing a top regulatory official.

Taking advantage of price bumps that often accompany share-repurchase announcements, company executives have been selling significantly more of their stock immediately after the news than they do beforehand, according to an analysis by Robert J. Jackson, Jr. , a commissioner at the Securities and Exchange Commission.

In a speech on Monday, Jackson—appointed by President Donald Trump and sworn in this year to fill a Democratic seat at the SEC—urges regulators to review securities laws that provide protection to insiders making such trades.

Insiders who sell stock into buyout bounces aren’t trading illegally, of course, and Jackson isn’t accusing them of that. And other investors also have the opportunity to take advantage of the bumps. But these price surges can be especially beneficial to corporate executives holding large chunks of corporate stock looking for an uptick to unload shares.

An expanded version of this report appears at WSJ.com.

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