Sample case

A synthetic trade checked against synthetic firm policy. The people and the company are invented.

Case 5: Same sale, pre-arranged plan

Chief Financial Officer sells $400,000 of stock 2 days before earnings

It looks identical to the previous case. The difference is one field in the filing: the sale was reported under a plan set up in advance. A system that flags every pre-earnings sale buries analysts in false alarms.

Reasons for concern

The sale falls inside a blackout window (Jul 10, 2025 to Jul 22, 2025) around earnings news on Jul 20, 2025.
Trading just before results are public is exactly what blackout windows exist to prevent.

What could explain it

The filing reports the sale was made under a Rule 10b5-1 plan, a trading schedule set up in advance. That is a reported signal, not proof the plan qualifies for the legal defense.
Size is not the issue: $400,000 is well under the $10,000,000 single-trade limit for this role.

Answer key

Clear

Set when the scenario was designed. A rules-based reference investigation reaches it from the evidence.

AI investigator

EscalateDiffers from the answer key

Recorded live run on 2026-11-01 using gpt-4o-2024-08-06 and gpt-4o-mini-2024-07-18, costing $0.044.

What the safeguards reported

Claims check: 4 of 6 claims judged supported
Citations: 2 of 6 claims cite no evidence
Required checks: 6 of 6 run

A recorded run of the AI investigator

The conclusion and the claims below were written by the model. The checks beside them are code and a separate judging model.

What decides this case

The trade as filed

Filed on time

SCENARIO OFFICER FIVE, Chief Financial Officer of Acme Corp (ACME)

SSale4,000 shares × $100 = $400,000Jul 18, 2025

Filed: Jul 19, 2025 (Form 4), 1 trading day after the trade
Trading plan: Reported under a 10b5-1 plan

View source result call_TpwNPpV3ETmejUZB4q9JW15X

get_transaction_details({"accession_number":"SCENARIO-0000000001-25-000005"})

{
  "accession_number": "SCENARIO-0000000001-25-000005",
  "issuer_cik": "0000320193",
  "issuer_name": "Acme Corp",
  "issuer_ticker": "ACME",
  "filing_date": "2025-07-19",
  "document_type": "4",
  "reported_under_10b5_1": "true",
  "filing_lag_trading_days": 1,
  "rptowner_cik": "9000000005",
  "rptowner_name": "SCENARIO OFFICER FIVE",
  "rptowner_relationship": "Officer",
  "rptowner_title": "Chief Financial Officer",
  "transactions": [
    {
      "nonderiv_trans_sk": 1,
      "trans_date": "2025-07-18",
      "trans_code": "S",
      "trans_shares": 4000,
      "trans_priceper_share": 100,
      "trans_value": 400000,
      "trans_acquired_disp_cd": "D",
      "shrs_ownd_folwng_trans": null,
      "superseded": false,
      "superseded_by": null
    }
  ],
  "transaction_count": 1
}

Was news about to come out?

Inside a blackout window

Trade on Jul 18, 2025. The blackout runs Jul 10, 2025 to Jul 22, 2025, around earnings news on Jul 20, 2025.

View source result call_i0xKfT8k5Ikw5HKpAtclYT9Y

get_material_events({"issuer_cik":"0000320193","on_date":"2025-07-18"})

{
  "issuer_cik": "0000320193",
  "on_date": "2025-07-18",
  "in_blackout": true,
  "event_type": "earnings",
  "event_date": "2025-07-20",
  "blackout_start": "2025-07-10",
  "blackout_end": "2025-07-22"
}

Other evidence reviewed

What this role may trade

Within the limit

Largest trade: $400,000Single-trade limit: $10,000,000

Role: Officer (Executive)
Single-trade limit: $10,000,000
Rolling 90-day limit: $50,000,000
Blackout restrictions: High

View source result call_JmlMD6w8e2Iv1UwRyUQNoYyy

get_applicable_role_limits({"relationship":"Officer","title":"Chief Financial Officer"})

{
  "relationship": "Officer",
  "authorization_level": "Executive",
  "single_trade_limit": 10000000,
  "rolling_90d_limit": 50000000,
  "blackout_restrictions": "High",
  "currency": "USD"
}

Firm rules checked

R003Unusual Sale Pattern (Rapid Trading)Medium
R006High Volume Spike vs. Own BaselineMedium
R008Reported Rule 10b5-1 Plan (severity reducer)Low
R009Tax-Withholding Disposition (Code F, severity reducer)Low
R010Option Exercise (Code M, severity reducer)Low
R001Single Trade Limit ExceededHigh
R002Rolling 90-Day Volume ExceededHigh
R007Late Section 16(a) Filing (> 2 trading days)High
R004Large Sale After Recent AcquisitionCritical
R005Suspicious Timing Near EarningsCritical

View source result call_haFr3mATsM6A3sfqRnBfaQRm

get_compliance_rules({})

[
  {
    "rule_id": "R003",
    "rule_name": "Unusual Sale Pattern (Rapid Trading)",
    "threshold_value": 3,
    "rule_type": "pattern",
    "severity": "Medium"
  },
  {
    "rule_id": "R006",
    "rule_name": "High Volume Spike vs. Own Baseline",
    "threshold_value": 150000,
    "rule_type": "volume_spike",
    "severity": "Medium"
  },
  {
    "rule_id": "R008",
    "rule_name": "Reported Rule 10b5-1 Plan (severity reducer)",
    "threshold_value": null,
    "rule_type": "exculpatory",
    "severity": "Low"
  },
  {
    "rule_id": "R009",
    "rule_name": "Tax-Withholding Disposition (Code F, severity reducer)",
    "threshold_value": null,
    "rule_type": "exculpatory",
    "severity": "Low"
  },
  {
    "rule_id": "R010",
    "rule_name": "Option Exercise (Code M, severity reducer)",
    "threshold_value": null,
    "rule_type": "exculpatory",
    "severity": "Low"
  },
  {
    "rule_id": "R001",
    "rule_name": "Single Trade Limit Exceeded",
    "threshold_value": null,
    "rule_type": "single_limit",
    "severity": "High"
  },
  {
    "rule_id": "R002",
    "rule_name": "Rolling 90-Day Volume Exceeded",
    "threshold_value": null,
    "rule_type": "rolling_90d_limit",
    "severity": "High"
  },
  {
    "rule_id": "R007",
    "rule_name": "Late Section 16(a) Filing (> 2 trading days)",
    "threshold_value": 2,
    "rule_type": "filing_lateness",
    "severity": "High"
  },
  {
    "rule_id": "R004",
    "rule_name": "Large Sale After Recent Acquisition",
    "threshold_value": null,
    "rule_type": "timing",
    "severity": "Critical"
  },
  {
    "rule_id": "R005",
    "rule_name": "Suspicious Timing Near Earnings",
    "threshold_value": 5,
    "rule_type": "timing",
    "severity": "Critical"
  }
]

Total traded in the 90 days before

Within the limit

Total: $400,000Rolling limit: $50,000,000

Window ending: Jul 18, 2025
Transactions counted: 1
Sale: $400,000

View source result call_OIhIBTe9clMO0wgxwAL8xxHo

rolling_90d_trading_volume({"rptowner_cik":"9000000005","as_of_date":"2025-07-18"})

{
  "total_volume": 400000,
  "sales_volume": 400000,
  "purchases_volume": 0,
  "volume_by_code": {
    "S": 400000
  },
  "transaction_count": 1,
  "rptowner_cik": "9000000005",
  "window_end": "2025-07-18",
  "window_days": 90,
  "accession_numbers": [
    "SCENARIO-0000000001-25-000005"
  ]
}

Their own trading history

No history to compare

No earlier trades by this insider were found in the 180 days before this one, so there is nothing to compare it against.

View source result call_y5uzBljukuinq1EhNgHDfVvg

insider_trading_baseline({"rptowner_cik":"9000000005","as_of_date":"2025-07-18"})

{
  "rptowner_cik": "9000000005",
  "as_of_date": "2025-07-18",
  "lookback_days": 180,
  "transaction_count": 0,
  "message": "No prior transactions found in this window"
}

Firm rules checked

R003Unusual Sale Pattern (Rapid Trading)Medium
R006High Volume Spike vs. Own BaselineMedium
R008Reported Rule 10b5-1 Plan (severity reducer)Low
R009Tax-Withholding Disposition (Code F, severity reducer)Low
R010Option Exercise (Code M, severity reducer)Low
R001Single Trade Limit ExceededHigh
R002Rolling 90-Day Volume ExceededHigh
R007Late Section 16(a) Filing (> 2 trading days)High
R004Large Sale After Recent AcquisitionCritical
R005Suspicious Timing Near EarningsCritical

View source result call_ToLA4nD0oVjTI9kGHeMU2Y1r

get_compliance_rules({})

[
  {
    "rule_id": "R003",
    "rule_name": "Unusual Sale Pattern (Rapid Trading)",
    "threshold_value": 3,
    "rule_type": "pattern",
    "severity": "Medium"
  },
  {
    "rule_id": "R006",
    "rule_name": "High Volume Spike vs. Own Baseline",
    "threshold_value": 150000,
    "rule_type": "volume_spike",
    "severity": "Medium"
  },
  {
    "rule_id": "R008",
    "rule_name": "Reported Rule 10b5-1 Plan (severity reducer)",
    "threshold_value": null,
    "rule_type": "exculpatory",
    "severity": "Low"
  },
  {
    "rule_id": "R009",
    "rule_name": "Tax-Withholding Disposition (Code F, severity reducer)",
    "threshold_value": null,
    "rule_type": "exculpatory",
    "severity": "Low"
  },
  {
    "rule_id": "R010",
    "rule_name": "Option Exercise (Code M, severity reducer)",
    "threshold_value": null,
    "rule_type": "exculpatory",
    "severity": "Low"
  },
  {
    "rule_id": "R001",
    "rule_name": "Single Trade Limit Exceeded",
    "threshold_value": null,
    "rule_type": "single_limit",
    "severity": "High"
  },
  {
    "rule_id": "R002",
    "rule_name": "Rolling 90-Day Volume Exceeded",
    "threshold_value": null,
    "rule_type": "rolling_90d_limit",
    "severity": "High"
  },
  {
    "rule_id": "R007",
    "rule_name": "Late Section 16(a) Filing (> 2 trading days)",
    "threshold_value": 2,
    "rule_type": "filing_lateness",
    "severity": "High"
  },
  {
    "rule_id": "R004",
    "rule_name": "Large Sale After Recent Acquisition",
    "threshold_value": null,
    "rule_type": "timing",
    "severity": "Critical"
  },
  {
    "rule_id": "R005",
    "rule_name": "Suspicious Timing Near Earnings",
    "threshold_value": 5,
    "rule_type": "timing",
    "severity": "Critical"
  }
]

Finding

EscalateSeverity: CriticalConfidence: highReported under a 10b5-1 plan

The insider, SCENARIO OFFICER FIVE, executed a sale of 4,000 shares on July 18, 2025, totaling $400,000. This transaction occurred during a blackout period due to an upcoming earnings announcement on July 20, 2025. According to compliance rule R005, trading near earnings announcements is considered a critical compliance issue. Despite the transaction being reported under a Rule 10b5-1 plan, the timing raises significant concerns about compliance with insider trading regulations. Immediate attention is warranted to assess the implications of this transaction during the blackout period.

Rules cited

R005 Suspicious Timing Near Earnings (Critical)

Exculpatory factors

reported under 10b5 1 (transaction 1)
below all thresholds (transaction 1)

Grounding: 4/6 claims supported, confidence: low, 2 unsupported. Unverified claims remain: human review required

Claims check

The insider, SCENARIO OFFICER FIVE, executed a sale of 4,000 shares on July 18, 2025, totaling $400,000.
The tool result confirms the sale of 4,000 shares on July 18, 2025, totaling $400,000.
call_TpwNPpV3ETmejUZB4q9JW15X
This transaction occurred during a blackout period due to an upcoming earnings announcement on July 20, 2025.
The tool result indicates the transaction occurred during a blackout period due to an upcoming earnings announcement on July 20, 2025.
call_i0xKfT8k5Ikw5HKpAtclYT9Y
According to compliance rule R005, trading near earnings announcements is considered a critical compliance issue.
The tool result lists rule R005 as concerning trading near earnings announcements, with a severity of 'Critical'.
call_haFr3mATsM6A3sfqRnBfaQRm
The transaction was reported under a Rule 10b5-1 plan.
The tool result confirms the transaction was reported under a Rule 10b5-1 plan.
call_TpwNPpV3ETmejUZB4q9JW15X
The timing of the transaction raises significant concerns about compliance with insider trading regulations.
No tool call is cited for this claim, so it is unsupported.
Cites no evidence
Immediate attention is warranted to assess the implications of this transaction during the blackout period.
No tool call is cited for this claim, so it is unsupported.
Cites no evidence

Process audit

Checked in code, with no AI judgement. It records how the investigation worked; it never changes the finding.

Required evidence gathered
Every required tool was called.
6 of 6 tools
Transaction details first
The first call was get_transaction_details.
Yes
Citations all real
Some claims cite no evidence at all.
Problem
Exemptions supported
Backed by the filing: reported under 10b5 1.
Supported

Run this case yourself

Starts a new live investigation on this filing. It uses the server's model credits, and the result will differ a little from the recorded run.

Re-run this case live

Compare with Sale just before earnings.

Reasons for concern

What could explain it

Answer key

AI investigator

What the safeguards reported

What decides this case

The trade as filed

Was news about to come out?

Other evidence reviewed

What this role may trade

Firm rules checked

Total traded in the 90 days before

Their own trading history

Firm rules checked

FindingThe investigation's outcome. Clear means nothing to follow up, flag means an analyst should look, escalate means it needs urgent review.

Rules cited

Exculpatory factorsA fact from the filing that explains a trade innocently, such as tax withholding or an option exercise. Each one applies to a single transaction line, never to the whole filing.

Claims checkOne factual sentence pulled out of the draft so it can be checked on its own.

Process auditA check, done in code, of how the investigation got to its finding: whether it gathered all the evidence, cited only real tool calls and claimed only supported exemptions.

Run this case yourself

Finding

Exculpatory factors

Claims check

Process audit