Insider trading involves the purchase or sale of AFC® securities while in possession of material nonpublic information ("inside information") about the Company. It also involves disclosing or "tipping" inside information about AFC to others who purchase or sell AFC securities. These activities violate AFC policy as well as federal securities law.
The possession of material nonpublic information requires significant legal and ethical responsibilities not to profit from it, and not to allow others to do so. Material information is that which would probably affect any investor's decision to buy, sell or hold securities, or would affect the market value of the securities if publicly disclosed.
Examples of material information include:
- dividend increases or decreases;
- earnings estimates or results, or a change in announced estimates;
- significant increase or decline in business or operations activities;
- stock splits or dividends;
- mergers or acquisitions;
- agreements to purchase or sell substantial assets;
- significant new products, services or discoveries;
- unusual or large borrowing;
- offerings or proposals to offer debt or stock securities for sale;
- commencement or settlement of a major claim or lawsuit;
- liquidity problems; and
- significant management developments.
- The purchase or sale of AFC securities while in possession of inside information about AFC is prohibited.
- Tipping inside information about AFC to others who purchase or sell AFC securities is prohibited.
As a result:
AFC directors, officers and employees with inside information may not:
- buy or sell AFC securities through any channel;
- buy or sell AFC common stock through any channel, including stock savings plans; or
- provide that information to another person to enable that person to buy or sell AFC securities or to advise others to do so.
AFC directors, officers and employees with inside information about another company may not:
- buy or sell securities in that company if the inside information was obtained as a result of their employment with AFC; or
- disclose that inside information to another person, to enable that person to buy or sell AFC securities, or to advise others to do so.
Illegal insider trading can occur when a director, officer or employee of AFC:
- buys or sells AFC's debt or stock securities while in possession of material nonpublic information concerning AFC, regardless of how the transaction is arranged, or discloses that information to another to do so; or
- buys or sells stock securities of another company while in possession of inside information about that company obtained as a result of employment with AFC, or discloses that information to another to do so.
Penalties can include both civil penalties of up to three (3) times the profit gained or loss avoided, injunctions, and forfeiture of profits; and/or criminal penalties up to $1 million and/or ten (10) years in prison for each violation. AFC and its officers, directors and managers may also be subject to monetary civil and criminal penalties for employees' insider trading violations.
For more information:
Office of General Counsel