This Policy Statement implements procedures to deter the misuse of material, nonpublic information in securities transactions. The Policy Statement applies to securities trading and information handling by directors, officers and employees of the company (including spouses, minor children and adult members of their households).
California Policies and Procedures Designed to Detect and Prevent Insider Trading refers to the illegal practice of trading securities (such as stocks, bonds, or derivatives) based on material non-public information. To combat insider trading and ensure fair and transparent markets, California has implemented various policies and procedures designed to detect and prevent this unlawful activity. These policies are enforced by regulatory bodies such as the California Department of Business Oversight (DBO) and the California Securities and Exchange Commission (SEC). 1. California Securities Laws: California has a comprehensive set of statutes and regulations that govern securities transactions within the state. These laws include the California Corporate Securities Law (CSL) and the California Uniform Securities Act (USA). These acts outline the legal framework to detect, investigate, and prosecute instances of insider trading. 2. Regulatory Oversight and Monitoring: The DBO and California SEC are responsible for the oversight and monitoring of securities transactions taking place within the state. They employ a vigilant approach to detect suspicious trading activities and investigate potential cases of insider trading. These regulatory bodies employ sophisticated surveillance technologies and data analytics to identify patterns and anomalies that may indicate insider trading. 3. Reporting Requirements: California imposes strict reporting requirements on individuals and entities involved in securities transactions. Examples of such reporting obligations include the filing of insider trading reports, disclosure of holdings, and disclosures of material non-public information. These reporting requirements aim to increase transparency in the market and deter insider trading. 4. Legal Disclosure Obligations: California mandates that insiders, such as corporate officers, directors, and large shareholders, disclose their ownership interests in a company's securities. These individuals must file regular reports with the DBO and SEC, disclosing their ownership stakes, changes in holdings, and any transactions they engage in. This information allows regulators and investors to monitor trading activity and identify any potential cases of insider trading. 5. Whistleblower Protection: California provides robust whistleblower protection under the California Whistleblower Protection Act. This act safeguards individuals who come forward with information regarding insider trading from retaliation or discrimination. It encourages individuals to report any suspicious activities they witness and provides them with legal protection and incentives. 6. Enforcement and Penalties: California has a strong commitment to enforcing insider trading laws. Violations of insider trading laws can result in significant penalties, including fines, disgorgement of profits, and even imprisonment. Regulatory bodies actively investigate and prosecute cases of insider trading, sending a strong message that such activity will not be tolerated. It is important to note that while the aforementioned policies and procedures are relevant to California's efforts to detect and prevent insider trading, they align with broader federal regulations established by the SEC. Insider trading is a serious offense, and both federal and state authorities collaborate to ensure its prevention and enforcement of penalties.
