Insider trading clause: Copy, customize, and use instantly
Introduction
An insider trading clause prohibits the parties involved in a contract from using non-public, material information obtained during the course of the agreement to trade securities or financial assets. This clause is crucial for ensuring that all parties adhere to legal and ethical standards in relation to financial markets and protecting against potential conflicts of interest, especially where confidential information may give an unfair advantage.
Below are templates for insider trading clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard insider trading clause
This version provides a general framework for insider trading.
The Party agrees that they shall not, during the term of this Agreement or for [X] years thereafter, use any non-public, material information gained from this Agreement to trade securities or other financial instruments of any company, including [Party A], or any other entities related to the subject matter of this Agreement.
Insider trading clause with provision for compliance with laws
This version emphasizes compliance with laws.
The Party acknowledges and agrees to comply with all applicable laws and regulations related to insider trading, including but not limited to the Securities Exchange Act of 1934. The Party further agrees not to use any material non-public information obtained during the term of this Agreement for trading or advising on securities or other financial instruments.
Insider trading clause with provision for confidentiality
This clause ties insider trading to confidentiality obligations.
The Party agrees that during the term of this Agreement and for [X] years following its termination, they will not use any confidential or proprietary information, whether or not publicly disclosed, for the purpose of trading in any securities or financial instruments.
Insider trading clause with provision for penalties and enforcement
This version includes penalties and enforcement provisions.
The Party acknowledges that any violation of insider trading laws as set forth in this Agreement will result in penalties, including but not limited to financial damages, and potential legal action. Any violation will also be deemed a breach of this Agreement, entitling [Party A] to terminate the Agreement and pursue any available remedies.
Insider trading clause with provision for restricted access to material non-public information
This version restricts access to material non-public information.
The Party agrees that they will not seek, access, or use any material non-public information related to the securities of [Party A] or any other related entities obtained during the term of this Agreement for trading purposes, unless authorized under applicable laws.
Insider trading clause with provision for no disclosure to third parties
This version prohibits disclosure to third parties.
The Party agrees not to disclose any material non-public information obtained under this Agreement to any third party for the purpose of trading in securities or other financial instruments.
Insider trading clause with provision for compliance training
This clause includes compliance training.
The Party agrees to undergo any required compliance training regarding insider trading laws and regulations during the term of this Agreement, ensuring they understand their obligations and prohibitions related to the use of non-public, material information.
Insider trading clause with provision for no securities trading during closed periods
This version restricts trading during closed periods.
The Party agrees that they will not trade any securities of [Party A] or any related entities during closed periods, which are defined as periods when the Party has access to non-public, material information that could affect the trading price of those securities.
Insider trading clause with provision for investigation and audit
This clause allows for investigation and audit.
The Party agrees to allow [Party A] to conduct periodic investigations or audits to ensure compliance with this insider trading clause, including reviewing any trading activities that may involve non-public, material information gained during the term of this Agreement.
Insider trading clause with provision for reporting obligations
This version includes reporting obligations.
The Party agrees to report to [Party A] any potential violations or concerns related to insider trading, including any trades made based on non-public information obtained during the course of this Agreement.
Insider trading clause with provision for immediate reporting of trades
This version requires immediate reporting of trades.
The Party agrees to immediately disclose to [Party A] any trades they conduct involving the securities of [Party A] or any related entities during the term of this Agreement, where the trades were made based on any non-public, material information obtained.
Insider trading clause with provision for prohibition of trading on rumors
This version prohibits trading on rumors.
The Party agrees that they will not trade securities or financial instruments based on rumors or speculation related to material non-public information, whether or not the information is accurate or verified.
Insider trading clause with provision for enforcement under applicable law
This clause emphasizes enforcement under law.
The Party acknowledges that any violation of the insider trading provisions in this Agreement will be subject to enforcement under the laws of [jurisdiction], including penalties as determined by applicable securities regulations.
Insider trading clause with provision for acknowledgment of legal risks
This version emphasizes awareness of legal risks.
The Party acknowledges that insider trading is illegal under applicable law, and agrees not to use any material non-public information for personal gain, understanding that violations may result in criminal or civil penalties.
Insider trading clause with provision for severability
This version includes a severability provision.
If any provision of this insider trading clause is found to be invalid or unenforceable, the remaining provisions of this Agreement shall continue to apply, and the invalid provision shall be modified to the extent necessary to ensure it is enforceable.
Insider trading clause with provision for no misuse of material information
This clause prohibits the misuse of material information.
The Party agrees that they will not use any material non-public information obtained under this Agreement to inform their trading decisions or those of others, whether for personal gain or otherwise.
Insider trading clause with provision for restrictions post-termination
This version restricts trading post-termination.
The Party agrees that for [X] years following the termination of this Agreement, they will continue to be bound by the terms of this insider trading clause, including the prohibition on using non-public, material information obtained during the Agreement.
Insider trading clause with provision for confidentiality obligations
This version ties insider trading to confidentiality obligations.
The Party agrees that all information received during the term of this Agreement, including material non-public information, is confidential and cannot be used for trading securities or financial instruments.
Insider trading clause with provision for penalties and damages
This clause includes penalties and damages.
The Party agrees that any violation of this insider trading clause will result in the payment of liquidated damages, and the Party may be liable for additional penalties as determined by applicable law.
Insider trading clause with provision for audit of financial records
This version allows for the audit of financial records.
The Party agrees to permit [Party A] to audit any relevant financial records or transactions for a period of [X] years following the termination of this Agreement to verify compliance with the insider trading clause.
Insider trading clause with provision for cooperation with authorities
This version includes cooperation with authorities.
The Party agrees to fully cooperate with any regulatory or law enforcement authorities in investigating potential insider trading violations related to this Agreement, including providing requested documents or testimony.
Insider trading clause with provision for notification of legal violations
This clause requires notification of legal violations.
The Party agrees to promptly notify [Party A] if they become aware of any legal violations or potential insider trading activities related to this Agreement, whether involving themselves or other parties.
Insider trading clause with provision for pre-approval of trades
This version requires pre-approval of trades.
The Party agrees that any trades involving securities of [Party A] or any related entities must be pre-approved by [Party A] if the Party has access to non-public, material information regarding those securities.
Insider trading clause with provision for strict non-disclosure
This version includes strict non-disclosure.
The Party agrees that during the term of this Agreement and for [X] years after its termination, they will not disclose, share, or use any material non-public information obtained through this Agreement for personal benefit or any third party’s benefit in trading any securities or financial instruments.
Insider trading clause with provision for trading restrictions
This version includes specific trading restrictions.
The Party agrees that, during the term of this Agreement and for [X] years after termination, they will not trade or make any investment decisions in relation to [Party A]’s stock, bonds, or securities based on any non-public, material information obtained under this Agreement.
Insider trading clause with provision for audit of trading activity
This version allows for an audit of trading activity.
The Party agrees to permit [Party A] to audit any trades involving securities of [Party A] or related entities during the term of this Agreement, to ensure compliance with the provisions of this insider trading clause.
Insider trading clause with provision for no influence on others’ trades
This version prevents influencing others’ trades.
The Party agrees not to share or use any material non-public information obtained during the term of this Agreement to influence, guide, or assist others in making decisions to trade or invest in securities of [Party A].
Insider trading clause with provision for reporting of suspicious activities
This version requires reporting of suspicious activities.
The Party agrees to immediately report to [Party A] any suspicious or potentially illegal insider trading activities, including but not limited to any trades made based on material non-public information, observed during or after the term of this Agreement.
Insider trading clause with provision for use of internal controls
This version includes internal controls for compliance.
The Party agrees to follow all internal controls, policies, and procedures provided by [Party A] for the purpose of ensuring compliance with insider trading laws and regulations during the term of this Agreement.
Insider trading clause with provision for temporary restrictions
This version includes temporary restrictions.
The Party agrees that during periods when they are in possession of material non-public information, including blackout periods, they will not trade in any securities or financial instruments related to [Party A] until the information becomes public.
Insider trading clause with provision for no trading on the basis of rumors
This version prohibits trading on rumors.
The Party agrees not to trade or make decisions to buy or sell any securities based on rumors or speculative information, even if related to [Party A], unless such information is publicly disclosed and verified.
Insider trading clause with provision for training on legal obligations
This version includes training on legal obligations.
The Party agrees to undergo training regarding insider trading laws and their legal obligations under this Agreement, which will be provided by [Party A] as a part of the initial onboarding or annually thereafter.
Insider trading clause with provision for no market manipulation
This version prohibits market manipulation.
The Party agrees not to engage in any form of market manipulation involving the securities of [Party A] or any other related entities during the term of this Agreement and for [X] years after its termination.
Insider trading clause with provision for indemnification in case of violation
This version includes indemnification.
The Party agrees to indemnify and hold [Party A] harmless from any damages, fines, or legal costs arising from a breach of the insider trading provisions of this Agreement, including any actions taken based on non-public information.
Insider trading clause with provision for actions outside the jurisdiction
This version extends to actions outside the jurisdiction.
The Party agrees that this insider trading clause applies even to actions taken outside the jurisdiction of [Party A]’s primary operations, as insider trading laws are often enforceable globally.
Insider trading clause with provision for no speculative trading
This version restricts speculative trading.
The Party agrees not to engage in speculative trading involving the securities or financial instruments of [Party A] or related entities, using any material non-public information during or after the term of this Agreement.
Insider trading clause with provision for compliance monitoring
This version allows monitoring for compliance.
The Party agrees to be subject to regular monitoring by [Party A] to ensure compliance with insider trading laws, including periodic checks of trading activity during and after the term of this Agreement.
Insider trading clause with provision for confidentiality during audits
This version includes confidentiality during audits.
The Party agrees to keep all findings from audits regarding insider trading activities confidential, unless required by law to disclose such findings. This includes audit findings related to trading activities based on non-public information.
Insider trading clause with provision for self-reporting of violations
This version requires self-reporting of violations.
The Party agrees to self-report any violations of insider trading laws or any actions taken that could constitute insider trading related to this Agreement, whether involving themselves or any other parties.
Insider trading clause with provision for restrictions on trading during certain periods
This version includes restrictions on trading during certain periods.
The Party agrees that during periods of significant corporate events or announcements, such as mergers, acquisitions, or earnings releases, they will refrain from trading in securities of [Party A] until the information is publicly disclosed.
Insider trading clause with provision for no trading based on incomplete information
This version restricts trading based on incomplete information.
The Party agrees that they will not trade or provide advice on trading securities if they are in possession of incomplete or unverified material non-public information, even if such information relates to [Party A].
Insider trading clause with provision for potential legal action
This clause allows for legal action if violated.
The Party agrees that any breach of this insider trading clause may result in legal action by [Party A], including civil claims for damages, penalties, or injunctions to prevent further violations of the terms herein.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.