RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Gigs is overIt is possible for a company's president/manager/CEO to know material information before the Board knows. Sometimes, this is due to a short communications delay, and in other cases, the time frame before the Board learns of information is more significant. In the latter case, it can be due to reasons such as the P/M/CEO needing time to ascertain all the facts before presenting to the Board.
For example, lets assume that a Board of XYZ company knew that a CEO was trying to secure contracts to sell their new product SuperWidget, and the CEO got a call from company ABC on Thursday afternoon that ABC was interesting in buying a large quantity of SuperWidgets. A follow-up call from the CEO to company ABC on Thursday evening revealed that ABC wants to buy at least 4,000,000 units, which would represent 6x the annual revenue of XYZ in the previous fiscal year. That becomes material. The CEO agrees to have a follow-up call on Friday afternoon to sort out particulars of the order. On Friday morning, a Board members buys a large chunk of stock in the open market, not yet knowing that the company has received material information. On Friday afternoon, more details are finalized, and the CEO sends out a message to the Board saying that he has a new item to add to the agenda for Monday afternoon's board meeting, and would like to start the meeting an hour earlier. On Monday morning, another Board member buys shares in the open market, still not knowing that a huge sales contract has been landed. The Board finds out at Monday afternoon's meeting that the contract has been awarded. Immediately after the board meeting, the board member who bought stock on Monday morning calls his/her lawyer to explain the situation and say, "How do I protect myself with due diligence to document that I had no inside information?"
In a hypothetical situation such as the above, various scenarios could play out, depending on a lot of details. In some cases, the SEC would find that no insider information influenced the stock purchase transaction, and in other cases, it might not meet the litmus test.
The point is that although Board members are considered to be Insiders of the company, awkward situations can sometimes arise where the Board does not receive material information at the same time as direct management. It's also possible that in the above example, the Board's knowledge that contracts were being pursued might be sufficient to cause expectation that material information might be forthcoming, which could create the expectation of a lockout period.
There can be a lot of gray areas in a situation like the one that I just outlined.
In the case of KWG, one would expect that the Board would know about the agenda for the Special Meeting. I suspect that KWG's board is fully aware of the agenda for the April 21st meeting. Therefore, if there is material information currently available, Board members should not be able to participate in the PP. However, if there is only the possibility that something material could happen, and the April 21st meeting is intended to come to a resolution about how to proceed if such an event happens, then it's possible that board members are still safe to trade.
Also, be aware that insiders and/or board members may NOT be able to trade at the present time. We knew that they could trade last week for the mini-PP, but it's also possible that the sudden need for this large PP is based on a material event that took place very recently but after the mini-PP closed, and that Board members are not purchasing shares currently. Comments earlier about board members selling shares into the open market in order to have funds to buy into the PP are merely speculation at the present time.
The above is my personal understanding re. legalities, based upon a basic academic program studying corporate law (MBA, not law school). And that was well over a decade ago. I strive to be accurate, but the reader should not consider this to be legal advice. If you're really curious about this, you should seek proper qualified legal advice for a better answer than mine.