On January 13, 2020, the House of Representatives, in a vote of 384 to 7, passed the 8-K Trading Gap Act (the “Bill”). The Bill is designed to address the trading of equity securities of a company by its corporate insiders between the occurrence of a reportable event requiring the filing of a Form 8-K and the filing (or furnishing, as applicable) of the Form 8-K itself (the “8-K Trading Gap”). Form 8-K permits up to four business days to pass following the occurrence of an 8-K reportable event until the filing is required. Although many public companies already have internal policies and procedures designed to prevent executives and directors from trading company stock before the public disclosure of a significant corporate event on Form 8-K (or otherwise), the Bill, if enacted, would require as a matter of law that all public companies maintain such policies and procedures.
January 23, 2020