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Rule 10b5 is one of the most important acts put forth by the SEC. It prohibits fraud, misrepresentation, and deceit in the sale and purchase of securities on national exchanges.It's often said that insider selling can be a hint that they know that their stock is about to underperform the market. Even though this is true in some cases, it's also true that insider selling is frequently simply behind financial reasons of the insiders and have no connection with the company's prospects.
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