Let’s say a biotech CEO learns that, in two days, her company is going to announce clinical results that will surely boost its stock price. She can’t legally buy up a bunch of the company’s shares right then — that would be the bad kind of insider trading — but she can cancel a scheduled 10b5-1 sale to avoid dumping stock just before its price soars.
Most of you’ve seen Wolf of Wall Street I’m sure. I actually know a guy (or two) who used to work in a Boiler Room. They have great stories. It’s amazing what a skilled salesman can actually accomplish.
And for the record, Boiler Room was a much better movie IMHO!