Tl;dr: It is patently false that Coinbase execs and insiders sold shares in response to the company’s receipt of a Wells Notice. Coinbase execs and insiders all entered into 10B5-1 selling plans well ahead of the Wells notice. UPDATE Sept. 12, 2021: Recently, a number of false claims were made on and some press outlets about Coinbase executives and other insiders selling shares following the company’s receipt of a Wells Notice from the Securities and Exchange Commission (SEC) before the notice was disclosed by Coinbase to the public. k, a Wells Notice is the official way the SEC staff tells a company that it intends to recommend that the agency bring an enforcement action.
The assertion that Coinbase’s executives sold shares because of the communication from the SEC is patently false. , these sales were part of pre-approved and pre-scheduled set up by members of the Coinbase executive team and Board of Directors. These types of plans are very common for public company insiders to enter into and are designed to prevent individuals from making their own decisions on the timing of stock sales with the intent to prevent insider sales based on non-public knowledge, either good or bad. What’s more, Coinbase’s policies require that these trading plans can only be altered a) during the company’s open trading window and b) while the insider is not in possession of material non-public information (MNPI). Moreover, any changes to a plan only take effect following a “cooling off period” (i.e., the beginning of the company’s next trading window following alteration of the plan). We included these restrictions so that insiders can't make changes to their plans based on MNPI, either good or bad. Additionally, Coinbase does not allow its executives and Board members to trade outside of a 10b5-1 plan.
In this case, the trading plans were approved June 1, 2021, long before the company was served with the aforementioned Wells Notice on Sept. 1, 2021. Any changes made to these trading plans after their initial approval on June 1st would not take effect until the next employee trading window, in this case following our third quarter earnings call this coming November.
Nov 29, 2023,
3min read time
Nov 28, 2023