The Sarbanes-Oxley Act of 2002 stipulates that executives of a firm will still be able to sell their shares in the firm when other employees cannot.

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The failure of a variety of external control mechanisms led the U.S. Congress to pass the Sarbanes-Oxley Act in 2002. This act calls for many stringent measures that would ensure better governance of U.S. corporations. One of these measures is that executives must promptly reveal the sale of shares in firms they manage and are not allowed to sell when other employees cannot.

The Sarbanes-Oxley Act of 2002 Stipulates That Executives of a Firm