Do Corporate Insiders use Stock Buybacks for Personal Gain?18th May 2019
The findings show that shareholders may be exploiting a regulatory loophole—there is no regulation requiring companies to disclose buybacks immediately, or even to disclose on what days they execute buybacks. This creates the potential for executives to use stock buybacks to push up shares prices at the same time that they are selling their own personal shareholdings, thus profiting off of a corporate transaction. Given these findings, Palladino proposes that the SEC should rescind Rule 10b-18, and that Congress should ban the practice of stock buybacks in an effort to support a more productive, inclusive, and vibrant economy.
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