The following is not meant to be legal advice.
The Securities Exchange Commission (SEC) promulgated Rule 10b5-1 to allow an insider to trade when he/she is not truly engaged in manipulating the market. Rule 10b5- provides an affirmative defense to claims of insider trading.
Rule 10b5-1(c) provides that the plan must include an algorithm for determining the amount of securities to be purchased or sold and the price at which and the date on which the securities are to be purchased or sold; must specify the number of and price at which securities to be purchased or sold as well as the date on which the securities are to be purchased or sold; or must not permit the person to exercise any subsequent influence over how, when, or whether to effect purchases or sales.
The insider must be able to demonstrate that material, nonpublic information was not a factor in the trading decision. Rule 10b5-1 provides an affirmative defense against insider trading liability to anyone in possession of material, nonpublic information if, before becoming aware of the information, the person provided instructions to another person such as a broker to purchase or sell securities; entered into a binding contract to purchase or sell securities; or adopted a written plan for trading securities.
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