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SEC issues guidance around insider information

April 6. After four US senators sold off stocks before the COVID-19 market crash, the Justice Dept. and the FBI are looking into the matter. Under scrutiny are Sen. Richard Burr (R-NC), Sen. James Inhoffe (R-OK), Sen. Diane Feinstein (D-CA) and Sen. Kelly Loeffler, (R-Ga). The trades occurred before stocks dramatically fell in value due to the coronavirus pandemic—and soon after a private briefing on Jan. 24.

Meanwhile, the President assured Americans that the virus was “very well under control” and would have “a very good ending.”

Soon after the stock sales came to light, the Securities & Exchange Commission issued guidance around trading on the basis of insider information.

“We wish to emphasize the importance of maintaining market integrity and following corporate controls and procedures. For example, in these dynamic circumstances, corporate insiders are regularly learning new material nonpublic information that may hold an even greater value than under normal circumstances,” the SEC said in a statement.

The SEC said directors, officers, employees, and consultants and other outside professionals should be “mindful of their obligations to keep this information confidential.”

With so many businesses large and small coming to a standstill, earnings reports may be delayed due to COVID-19. The SEC said a greater number of people may have access to material nonpublic information than in less challenging times.

That said, the SEC is extending filing deadlines that may occur because of COVID-19.