CEOs Shed Stock After Bad News: Report

Law360, New York (July 31, 2006, 12:00 AM EDT) -- Corporate boards are at fault for not reporting why chief executives sell off so much of their company’s stock—especially stock options—when times get tough, according to a report on CEO stock sales from a corporate governance group.

While the report was far from alleging insider-trading, it drew a clear correlation between CEOs who shed large amounts of stock and companies that reported damaging news, such as litigation or violations of the Sarbanes-Oxley Act.

The report targeted CEOs who sold more than one-third of their stock in...
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