Blackouts and Reg BTR

[Guest erisafried]

I either have a puzzler or else I am missing something important regarding the intersecting provisions of ERISA's blackout period notice requirements and Reg BTR, both of which were sprouted by our pal, the SOX Act.

Imagine, if you will, a 401(k) plan with a company stock fund -- the plan sponsor is a public company. Periodically, participants are precluded from making volitional trades in the company stock fund during routine blackout periods associated with earnings releases, etc. These are brief periods (<3 days) usually, and are disclosed in various places including the company's insider trading policies.

Suppose further that the company perceives a need to limit trading in its stock by employees generally because of the possibility that they might possess inside information due some some extraordinary event -- new product release, unexpected business development, acquisition proposal, etc. The limitation would be attributable to the federal securities laws and would therefore arguably not be a "blackout period" for purposes of ERISA. However, the limitation would cause a blackout period for purposes of Reg BTR, which does not include an exception for limitations relating to compliance with the federal securities laws. So, the initial thought would be that an 8-K would be due under Reg BTR to report the trading limitation.

While this sort of thing might not be an everyday occurrence, it seems like it should happen with some regularity when public companies with 401(k) plans permitting company stock investments deal with unusual business events. However, there does not seem to be a great quantity of 8-K filings reporting this sort of thing, and this lead me to think that either: (1) there is some other basis that I have not found for avoiding the filing requirement; or (2) many or most companies are simply ignoring the requirement, and the SEC is not doing anything about it.

Anyone have any thoughts about this?