Hi ditter --
You are certainly on the right track by keeping an eye on what your
company executives are up to in the way of buying and selling their
stock. Insider data is an excellent first screen for selecting
investments, following investments you already own, and monitoring the
health of your company. However, do remember that even insiders make
mistakes. Don't bet the ranch on them!
As the commenters have mentioned, there are many sites where you can
find lists of trades made by executives of publicly held companies.
This is because the law requires than any corporate insiders or major
shareholders making an "inside trade" to file a Securities and
Exchange Commission (SEC) Form 4. These SEC Form 4 filings are public
information.
Forms 3, 4 and 5
"Every director, officer or owner of more than ten percent of a class
of equity securities registered under Section 12 of the '34 Act must
file with the Commission a statement of ownership regarding such
security. The initial filing is on Form 3 and changes are reported on
Form 4. The Annual Statement of beneficial ownership of securities is
on Form 5. The forms contain information on the reporting person's
relationship to the company and on purchases and sales of such equity
securities. "
http://www.sec.gov/info/edgar/forms.htm
http://www.sec.gov/divisions/corpfin/forms/form4.htm
In order to use the online sites, it is useful to know the ticker
symbol of the company you are searching for.
http://moneycentral.msn.com/investor/common/find.asp?NextPage=/investor/invsub/insider/trans.asp
I personally like the MSN Money Central site for its clarity and ease
of use. In the example below, I've searched for the inside trades at
Microsoft --
http://moneycentral.msn.com/investor/invsub/insider/trans.asp?Symbol=msft
You can use the same search bar to locate your company.
You will notice that the SEC itself has a database called Electronic
Data Gathering, Analysis, and Retrieval (EDGAR) which lists
information regarding company filings. One would think that this would
be the ideal root source for the information you are looking for,
however it turns out that it's not.
" (EDGAR) system is currently a poor source of Form 4 and Form 144
data. Why? Because it is not mandatory for insiders to file these
forms on EDGAR, and only 5 percent do. While the data on EDGAR is
reliable, the fact that it is not comprehensive severely limits its
usefulness."
http://www.quicken.com/support/investments/insider/help/?faq.q.edgar
http://www.sec.gov/edgar/quickedgar.htm
"Companies that are "reporting companies" under the federal securities
laws must file periodic reports on E.D.G.A.R. In addition, "control
persons" of a reporting company must file their own reports separate
from the company's. "
In short, a company becomes a "reporting company" when "… the
company's securities are held of record by at least 500 persons AND
the company has total assets exceeding $10,000,000. Section 12(b) of
the same Act mandates registration of the company's securities if it
desires to list them for trading on a securities exchange, regardless
of assets or shareholders."
http://www.donarenterprises.com/reporting.html
Now, please note that not all companies are required to file with the
SEC.
"Privately held companies are not subject to SEC regulations, which
typically apply to public companies."
http://www.businessweek.com/smallbiz/content/jun2000/sa000606.htm
" In addition, privately held companies generally are not required to
register with the SEC or to publicly report financial information and
other important company information."
http://www.smallcapstocknews.com/stock_offerings.asp?page=how
If your company is privately held, then the information you are
seeking may not be publicly available. What a private company must
share with you as an employee or shareholder is left to the states to
determine, so the rules vary.
" It is often assumed that, at a minimum, employee shareholders would
have a right to receive copies of the company's annual financial
statements and perhaps even more detailed access to the company's
books ... The law of the state in which the company is incorporated
controls legal rights to a company's financial data. .. there is some
variation from state to state … few states require significant
disclosure of financial information by small, privately held companies
to their shareholders (whether or not they also happen to be
employees). "
http://www.fed.org/onlinemag/aug00/tips.htm
I hope my links and the ones offered by the commenters below help you
keep a tab on what your corporate execs are up to as far as inside
trades go. If anything I've said is not clear, please feel free to ask
for a clarification.
--K~
Search terms:
SEC Form 4 filings
"Privately held companies" SEC rules |
