Insider Activities

12 USC 375

This statute prohibits the bank from engaging in preferential sales or purchases of securities or other property with directors or any firm of which a director is a member. Transactions with directors involving securities or other property are allowed only if (a) the sale or purchase is made in the regular course of business and the terms are comparable to those afforded the general public for the same securities or other property, or (b) the transaction is approved by a majority of the disinterested members of the board. However, compliance with section 375 does not absolve directors from the need to comply with their fiduciary duties.

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