Executive Stock Sales Face More Scrutiny as SEC Tightens Rules

An SEC proposal to curb insider trading would force executives to be more careful about selling company stock, as their scheduled trades face longer waiting periods and greater scrutiny from Wall Street cops and investors.

The Securities and Exchange Commission Dec. 15 proposed a rule that would establish a roughly four-month period between when executives can schedule a trade and then sell their stock, in order to take advantage of a safe harbor from enforcement. The agency also would require companies to disclose executives’ trading plans in quarterly reports.

The proposed rule is a “big deal” and would limit an ...