According to an 8K filed this morning,
On September 30, 2008, Michael Brent and Beth Brent entered into a Rule 10b5-1 Sales Plan ("Sales Plan") to be administered by Gilford Securities, Incorporated. Michael Brent is a ten percent shareholder of YTB International, Inc. (the "Company") and is the Chief Executive Officer of REZconnect Technologies, Inc., a wholly owned subsidiary of the Company.
During the one year term of the Sales Plan, the Sales Plan provides that Gilford Securities, Incorporated will sell under Rule 144 up to a maximum of four million shares of Class A Common Stock of the Company held by Mr. and Mrs. Brent, subject to the price and volume restrictions stated in the Sales Plan.
Apparently, according to Rule 10b5-1 of the SEC, people that are privy to non public insider information are prohibited from selling stock. This likely will prove to be a problem for Cauthen, Clagg, Scott Tomer, Coach Tomer and Kim Sorensen as they all had sold securities when the California Attorney General Investigation was ongoing and not disclosed. It may also be a problem for Brent, depending if that information was disclosed to him as well.
But there is a way out when someone is looking to minimize the risk. Essentially, a trustee handles the sales of securities at a predetermined schedule or per a predetermined formula. You can read about the details of the plan here.
According to Canaccord-Adams:
More corporate executives are using 10b5-1 plans to turn their risks into rewards with respect to trading company stock. Rule 10b5-1 plans allow corporate insiders to preclude trading liability and more easily access their personal wealth held in stock.
It seems that Michael Brent (who incidentally has already sold over a million shares in the last year) ,ay be concerned that because of what he knows as an insider, he may be guilty of violating insider trading rules. Essentially, he must feel that selling YTB stock is a personal risk.
What does this say?