Rule 10b-18

Rule 10b-18 is a regulation of the United States Securities and Exchange Commission (SEC) that governs the purchase of a company's stock by its own employees. The rule was adopted in 1979 and is designed to prevent companies from using their own stock to manipulate the market.

Under Rule 10b-18, a company can purchase its own stock only if it does so in a manner that does not artificially inflate the price of the stock. The rule also requires companies to disclose their purchases of their own stock in a timely manner.

The purpose of Rule 10b-18 is to protect investors from companies that might use their own stock to manipulate the market. By requiring companies to disclose their purchases of their own stock, the rule makes it more difficult for companies to engage in such manipulation.

Rule 10b-18 is a complex regulation, and there are a number of exceptions to the rule. For example, a company can purchase its own stock if it is doing so to comply with a court order or to satisfy a contractual obligation.

Companies that violate Rule 10b-18 can be subject to civil penalties, including fines and injunctions. In some cases, companies may also be required to return the profits they earned from their illegal purchases of their own stock.

Rule 10b-18 is an important regulation that helps to protect investors from companies that might try to manipulate the market. The rule is also a valuable tool for investors who want to understand the trading activity of companies in which they own stock.