10) a) There is widespread use of Rule 10b-5-1 trading plans by officers and directors of public companies who regularly possess material nonpublic information but who want to buy or sell stock of their corporation at a time when they are not in possession of material nonpublic information. Usually, a 100-5-1 trading plan is a contract between the insider and a broker. Why are these plans used by corporate insiders such as officers and directors?

b) Several academic studies suggest that Rule 10b-5-1 has led to above-market returns. These findings have caught the interest of federal prosecutors and the SEC enforcement staff. Explain why.