Cisco's quiet March 9 non-announcement: CEO John Chambers sold 1.8 million of his Cisco shares valued at $45 million
Tue, 03/09/10 - 11:56pm Add your comment
March 9, 2010, was the day that a Cisco announcement would reveal how Cisco would forever change the Internet and its impact on consumers, businesses and governments.
Interestingly, March 9 also turned out to be the day that an SEC Form 4 was filed late in the day at 6:47PM (almost 8 hours after Cisco's forever change the Internet announcement at 11AM EST), revealing that Cisco CEO John Chambers had sold 1.8 million of his Cisco shares for $45 million on March 5.
"Regulators are trying to determine whether automatic trading plans are being used by corporate executives to circumvent insider trading rules. Recent research has shown that trades by 10b5-1 plans have beaten the market and that sales from these plans are more likely to happen before, rather than after, price declines. The research also shows that participants in automatic trading plans gain higher returns than other insiders and there exists a pattern of plans stopping sales before price increases."
Only a month ago, Chambers sold2.2 million shares valued at $52.2 million and such large insider shareholder automatic trading plan sales during short time periods have also been catching the attention of BusinessWeek:
"Stock plans are enacted as a stock runs up toward a peak, and often the trading slows or stops altogether when the stock declines."
Finally, BusinessWeek reported that the U.S. Securities and Exchange Commission is examining possible abuses in automatic trading plans:
"The way the plans are being used 'isn't how they were supposed to work,' said a source familiar with the agency's views."
Cisco CEO John Chambers leads list of insiders selling
