Sullivan & Cromwell Discusses What Recent SEC Insider Trading Action Portends for Rule 10b5-1

On September 21, 2022, the Securities and Exchange Commission found that Cheetah Mobile Inc.’s Chief Executive Officer, Sheng Fu, and its former President, Ming Xu, committed insider trading in relation to securities they sold under a joint “10b5-1 plan.”  In addition to paying civil penalties, they also agreed in a Cease-and-Desist Order to various undertakings, which notably includes Fu adhering to a 120-day cooling-off period for his future 10b5-1 plans.  The undertakings in the Order reflect the SEC’s recently proposed, but not yet adopted, amendments to Rule 10b5-1, perhaps signaling the next steps of the SEC and best-practices of the … Read more