EX-11.2 10 exhibit112.htm EX-11.2
Policies and Procedures to Detect and Prevent
Insider Trading
DIANA SHIPPING INC.
FOURTH AMENDED AND RESTATED
POLICIES AND PROCEDURES TO DETECT AND
PREVENT INSIDER TRADING
REVISED AS OF NOVEMBER 20,
2024
GENERAL
The Securities
Exchange Act
of 1934
prohibits the
misuse of
material, non-public
information. In
order
to
avoid
even
the
appearance
of
impropriety,
the
Company
has
instituted
procedures
to
prevent the misuse of non-public information.
Although "insider trading"
is not
defined in the
securities laws, it
is generally thought
to be
described
as trading
either personally
or on
behalf of
others on
the basis
of material
non-public information
or communicating material non-public information to others
in violation of the law.
This policy (the "Policy")
will be administered and
supervised by the Company’s
Chief Accounting
Officer. Please
pay special attention to the "Blackout"
and "Trading Window" policies
discussed in
this memorandum.
WHOM DOES THE POLICY COVER?
The Policy
covers all
of the
Company’s officers,
directors and
employees ("insiders"),
as well
as
any transactions in any Company securities (“securities”) participated in by family members, trusts
or
corporations
directly
or
indirectly
controlled
by
insiders.
In
addition,
the
Policy
applies
to
transactions engaged in by
corporations in which the
insider is an
officer, director or 10% or greater
stockholder and a partnership
of which the insider
is a partner,
unless the insider
has no direct or
indirect control over the partnership.
The Company forbids
any insider from
trading, either
for his or
her personal account
or on behalf
of others, while
in possession
of material
non-public information,
or communicating
material non-
public information
to others
in violation
of the
law.
This prohibited
conduct is
often referred
to as
"insider trading".
●
The
Policy
extends
to
each
insider’s
activities
within
and
outside
his/her
duties
at
the
Company. Each
insider must read and retain this statement.
●
Failure
to
comply
with
the
Policy
may
cause
an
employee
to
be
subject
to
disciplinary
action.
WHAT IS INSIDER TRADING?
The term "insider trading" generally
is used to refer to trading while
in possession of material non-
public information
(whether or
not one
is an
"insider") and/or
to communications
of material
non-
public information to
others. The law
in this area
is generally understood
to prohibit, among
other
things:
●
trading by an insider while in possession of material non
-public information;
●
trading by a non-insider
while in possession of
material non-public information,
where the
information either was disclosed
to the non-insider in violation
of an insider’s duty to keep
it confidential or the information was misappropriated;
●
trading while
in possession
of material
non-public
information
concerning
a tender
offer;
and
●
wrongfully communicating, or "tipping", material
non-public information to others or making
any
recommendations
or
expressing
opinions
on
the
basis
of
material
non-public
information
as
to
trading
in
Company
securities
unless
such
disclosure
is
made
in
accordance
with
Company
policies
regarding
the
protection
or
authorized
external
disclosure of
information. This
prohibition applies
whether or
not the
insider receives
any
benefit from the use of that information by the other person
or entity.
THE INSIDER CONCEPT
As a general guide for our directors, officers and employees,
components of what amounts to
"insider trading" are described below:
Who is an insider?
The
concept
of
"insider"
is
broad.
It
includes
officers,
directors,
trustees,
and
employees
of
a
company.
In
addition,
a
person
can
be
a
"temporary
insider"
if
he
or
she
enters
into
a
special
confidential relationship
in the
conduct of
a company’s
affairs
and as
a result
is given
access to
information solely for
the company’s
purposes. A
temporary insider
can include,
among others,
a
company’s attorneys, accountants, consultants, bank lending officers, and the employees of those
organizations.
What information is material?
Trading on information that
is "material" is
prohibited. Information generally is
considered "material"
if:
●
there is a substantial
likelihood that a
reasonable investor
would consider the
information
important in making an investment decision, or
●
the
information
is
reasonably
certain
to
have
a
substantial
effect
on
the
price
of
the
Company’s securities.
Information that should be considered material includes: dividend changes, earnings
estimates not
previously disseminated,
material changes
in previously
-released earnings
estimates,
significant
merger
or
acquisition
proposals
or
agreements,
major
litigation,
liquidity
problems,
and
extraordinary management developments.
What information is non-public?
Information
is
non-public
until
it
has
been
effectively
communicated
to
the
market
place.
For
example, information
found
in a
report filed
with
the U.S.
Securities
and
Exchange
Commission
(the
“SEC”),
or
appearing
in
Dow
Jones,
Reuters,
The
Wall
Street
Journal,
on
Bloomberg
or
in
other publications of
general circulation ordinarily would
be considered public.
In addition, in
certain
circumstances, information disseminated to certain
segments of the investment community
may be
deemed
"public",
for
example,
research
communicated
through
institutional
information
dissemination services such as First Call. (However, the fact that research has been disseminated
through such a service
does not automatically
mean that it is
public.) Remember,
it takes time for
information
to
become
public.
The
amount
of
time
since
the
information
was
first
disseminated
ordinarily is a factor regarding whether the information
is considered "public".
PENALTIES FOR INSIDER TRADING
Penalties
for
insider
trading
are
severe
both
for
the
individuals
involved
as
well
as
for
their
employers. A person
can be subject
to some or
all of the penalties
listed below,
even if he or
she
does not personally benefit from the violation. Penalties
may include:
●
Jail sentences;
●
Civil injunctions;
●
Civil treble (3x) damages;
●
Disgorgement of profits;
●
Criminal
fines
of
up
to
three
times
the
profit
gained
or
loss
avoided, whether
or
not
the
person actually benefited; and
●
Fines for the
employers or other
controlling person of
up to the
greater of $1
million or three
times the amount of the profit gained or loss avoided.
Clearly, it is in the Company’s and
your best interests for the
Company to put into
place procedures
to prevent improper trading by its insiders.
PROCEDURES TO PREVENT INSIDER TRADING
The following procedures have been established to aid
in the prevention of insider trading. Every
insider must follow these procedures or risk sanctions,
including: dismissal, substantial personal
liability and criminal penalties.
Questions to Ask
Prior
to
trading
in
the
Company’s
securities,
and
if
you
think
you
may
have
material
non-public
information, ask yourself the following questions:
●
Is the information material?
- Is this information
that an investor
would consider important
in making
an investment
decision? Would
you take
it into
account in
deciding whether
to
buy or
sell? Is
this information that
would affect the
market price
of the
securities if generally
disclosed?
●
Is the information
non-public -
To
whom has
this information
been provided?
Has it been
effectively communicated to the marketplace? Has
enough time gone by?
Action Required
If you are at all uncertain as to whether any information you have is "inside information", you must:
●
Immediately report the matter to the Chief Accounting Officer;
●
Refrain from purchasing or selling the securities;
and
●
Not communicate the information inside or outside the
Company.
After the employee
and the Chief
Accounting Officer
have reviewed
the issue
and consulted with
outside counsel to
the extent appropriate,
the insider
will be instructed
as to whether
he/she may
trade and/or communicate that information.
Blackout Policy and Trading
Window
To assure compliance with the Policy and applicable securities laws, the Company requires that all
insiders
refrain
from
conducting
transactions
involving
the
purchase
or
sale
of
the
Company's
securities other than during
the period commencing at
the open of the
New York
Stock Exchange
trading market on
the second business
day following the
date of public
disclosure of the
financial
results for
a particular
fiscal quarter
or year
and continuing
until the
close of
the New
York
Stock
Exchange on the fourteenth
(14
th
) day
after the
last day of
the current fiscal
quarter (the "Trading
Window").
In addition,
from
time to
time material
non-public
information
regarding
the Company
may be pending. While
such information is pending, the
Company may impose a
special "blackout"
period during which the same prohibitions and recommendations
shall apply.
Remember:
Even
during
the
Trading
Window,
any
person
possessing
material
non-public
information
concerning
the
Company,
should
not
engage
in
any
transactions
in
the
Company's
securities until such information has been made public and
absorbed by the market.
Trading According to a Pre-established Plan (10b5
-1)
The
SEC
has
adopted
Rule
10b5-1,
as
amended,
under
which
insider
trading
liability
can
be
avoided
if
insiders
follow
very
specific
procedures.
In
general,
such
procedures
involve
trading
according
to
pre-established
instructions,
plans
or
programs
(a
“10b5-1
Plan”)
after
a
required
“cooling off” period described below.
10b5-1 Plans must:
●
Be documented
by a
contract,
written plan,
or formal
instruction which
provides that
the
trade
take
place
in
the
future:
For
example,
an
insider
can
contract
to
sell
his
or
her
securities on a specific date, or simply
delegate such decisions to an investment manager,
401(k) plan administrator or
similar third party. This documentation must be
provided to the
Company’s Chief Financial Officer and Corporate
Secretary;
●
Include
in
its
documentation
the
specific
amount,
price
and
timing
of
the
trade,
or
the
formula for determining the
amount, price and timing
. For example, the insider
can buy or
sell securities
in a
specific amount
and on
a specific
date each
month, or
according to
a
pre-established percentage (of
the insider’s salary,
for example) each
time that the
share
price falls or rises to
pre-established levels. In the case where
trading decisions have been
delegated (i.e., to
a third party
broker or money
manager), the specific
amount, price and
timing need not be provided;
●
Be
implemented
at
a
time
when
the
insider
does not possess
material
non-public
information.
As a
practical
matter,
for restricted
insiders
this means
that
the insider
may
set up 10b5-1
Plans, or delegate
trading discretion, only during
an open Trading
Window
and outside a “blackout” period (discussed
above), assuming the restricted insider is not
in
possession of material non-public information;
●
Remain beyond
the scope
of the
insider’s influence
after implementation
. In general,
the
insider must allow
the 10b5-1 Plan
to be executed
without changes to
the accompanying
instructions,
and
the
insider
cannot
later
execute
a
hedge
transaction
that
modifies
the
effect of the 10b5-1
Plan. Insiders should be
aware that the termination
or modification of
a 10b5-1 Plan after trades have been undertaken under such plan could negate the 10b5-
1
affirmative
defense
afforded
by
such
program
for
all
such
prior
trades.
As
such,
termination or modification of a 10b-5
Plan should only be undertaken in consultation
with
your legal counsel.
If the insider
has delegated decision
-making authority
to a third
party,
the insider
cannot subsequently
influence the
third party
in any
way and
such third
party
must not possess material non-public information at the time of
any of the trades;
●
Be subject to
a “cooling off” period.
Rule 10b5-1 contains a
“cooling-off period” for directors
and officers that prohibit such insiders from trading in a
10b5-1 Plan until the later of (i) 90
days following
the plan’s
adoption or
modification
or (ii)
two business
days following
the
Company’s disclosure
(via a report
filed with the
SEC) of its
financial results for
the fiscal
quarter in which the plan was adopted or modified; and
●
Contain Insider
certifications.
Directors and
officers are
required to
include a
certification
in their 10b5-1 Plans to certify
that at the time the plan
is adopted or modified: (i) they
are
not aware
of material
non-public information
about the
Company or
its securities
and (ii)
they are
adopting
the
10b5-1
Plan in
good faith
and
not
as part
of
a plan
or scheme
to
evade the anti-fraud provisions of the U.S. Securities Exchange
Act of 1934.
In addition, insiders are
prohibited from having multiple overlapping
10b5-1 Plans or more
than one
plan in
any given
year and
a modification
relating to
amount, price
and timing
of trades
under a
10b5-1 Plan is
deemed a plan
termination and the
adoption of a
new 10b5-1 Plan
which requires
a new cooling off period.
Pre-Clearance of Trades
and 10b5-1 Plans
All
insiders
must
refrain
from
trading
in
Company
securities,
even
during
the
Trading
Window,
without
first
complying
with
the
Company's
"pre-clearance"
process.
Each
such
person
should
contact
the
Company's
Chief
Accounting
Officer
prior
to
commencing
any
trade.
The
Chief
Accounting
Officer
will
consult
as
necessary
with
senior
management
and/or
counsel
to
the
Company before clearing any proposed trade.
Each
insider
is
solely
responsible
for
compliance
with
all
applicable
securities
laws,
rules
and
regulations related to
any trading of
Company securities by such
insider, including without limitation
the timely filing
of any and
all forms, schedules
and other filings
required by Rule
144 of the
U.S.
Securities
Act
of
1933,
as
amended,
Sections
13
and
16,
as
applicable,
of
the
U.S.
Securities
Exchange Act
of 1934,
as amended,
and any
other applicable
securities laws.
The clearance
of
any
proposed
trade
may,
at
the
discretion
of
the
Company,
be
conditioned
on
the
Company’s
review and reasonable satisfaction with such filings or other compliance
requirements.
Additionally, Rule 10b5-1 Plans and any
amendments thereto must be
approved by the Company’s
Chief
Financial
Officer
or
Corporate
Secretary
and
meet
the
requirements
of
Rule
10b5-1
guidelines
detailed
in
this
Policy.
Any
Rule
10b5-1
Plan
must
be
submitted
for
approval
five
business days prior to the entry into the Rule 10b5-1 Plan.
QUESTIONS OR CONCERNS
Any questions
or concerns regarding
the Company’s Policies
and Procedures to
detect and prevent
insider trading should be directed to the Chief Accounting Officer, or, if such questions or concerns
involve the Chief Accounting Officer,
to the Chief Financial Officer.
The Chief Accounting Officer’s
personal trading activity will be reviewed by the Chief Financial
Officer.