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| Subject: SEC Rule 10b-18 In 1982, the US Securities and Commission adopted Rule 10b-18,4 which provides that an issuer will not be deemed to have violated Sections 9(a)(2) and 10(b) of the Exchange Act, and Rule 10b-5 under the Exchange Act, solely by reason of the manner, timing, price, or volume of its repurchases, if the issuer repurchases its common stock in the market in accordance with the safe harbor conditions. Rule 10b-18’s safe harbor conditions are designed to minimize the market impact of the issuer’s repurchases, thereby allowing the market to establish a security’s price based on independent market forces without undue influence by the issuer. The practical effect of this rule was to encourage massive stock buybacks by corporations as a means of manipulating prices upwards in order to give value to executive stock options. Recipe for fraud? By John Schroy, on July 3rd, 2006 |  Leave a comment  Stock buyback programs are a legalized form of market manipulation, sanctioned under SEC Rule 10b-18 and that serve to drive up the price of a company’s stock and to give false value to executive stock options — something that the SEC considers a “legitimate business reason” for rigging the market. However there is no safe harbor for insider trading. July 3rd, 2006 | Print Article |  Email Article |  Topics: executive stock options, hedge funds, insider trading, SEC Rule 10b-18, Stock Buybacks, US SEC | Category: Stock Buybacks, featured | Leave a comment |  Short urlStock Buybacks By John Schroy, on March 18th, 2006 | Leave a comment  In a major article on March 18, 2006, the Wall Street Journal reported that the Securities and Exchange Commission was investigating the possibility that corporate executives were back-dating their stock options to achieve greater profits when these options were exercised. The article did not mention stock buybacks, nor the link between stock buybacks and the legalized price manipulation that is the key to giving value to executive options. March 18th, 2006 | Print Article | Email Article | Topics: executive stock options, market manipulation, SEC Rule 10b-18, Stock Buybacks, US SEC | Category: Stock Buybacks | Leave a comment | Short urlCorporate governance in 2005 By John Schroy, on March 16th, 2006 | Leave a comment  Repurchases of company stock, mostly under the safe harbor exemption from market manipulation provided by SEC Rule 10b-18, set an all time record of $366 billion (net) in 2005. This was 260% of levels in 2004 and 880% of buybacks in 2002. Despite extremely aggressive tactics of corporate management to manipulate stock prices upwards and give value to option and bonus plans, stock prices rose only about 3% in 2005, on average. March 16th, 2006 | Print Article | Email Article | Topics: Corporate Governance, executive stock options, SEC Rule 10b-18, Stock Buybacks | Category: Stock Buybacks | Leave a comment | Short urlFeatured articles on inside pages
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