Sample case

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

Case 6: Large tax withholding

Chief Operating Officer's filing shows $5,000,000 of shares withheld to pay tax

Large and a disposition are both alarming words. But this is shares withheld to pay tax, which is routine. Flagging it would be a false alarm.

Reasons for concern

A $5,000,000 disposition is large in dollar terms.

What could explain it

Code F means shares were withheld to cover a tax bill, not sold on the market. It is routine, and treated as exempt.
At $5,000,000, the trade is 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

ClearMatches the answer key

Recorded live run on 2026-11-01 using gpt-4o-2024-08-06 and gpt-4o-mini-2024-07-18, costing $0.042.

What the safeguards reported

Claims check: 7 of 9 claims judged supported
Citations: 1 of 9 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 SIX, Chief Operating Officer of Acme Corp (ACME)

FShares withheld for tax50,000 shares × $100 = $5,000,000Jun 15, 2025

Filed: Jun 16, 2025 (Form 4), 1 trading day after the trade
Trading plan: 10b5-1 status: not established

View source result call_C3vwOpe7A5CJmDcZ1hotYwna

get_transaction_details({"accession_number":"SCENARIO-0000000001-25-000006"})

{
  "accession_number": "SCENARIO-0000000001-25-000006",
  "issuer_cik": "0000320193",
  "issuer_name": "Acme Corp",
  "issuer_ticker": "ACME",
  "filing_date": "2025-06-16",
  "document_type": "4",
  "reported_under_10b5_1": "unknown",
  "filing_lag_trading_days": 1,
  "rptowner_cik": "9000000006",
  "rptowner_name": "SCENARIO OFFICER SIX",
  "rptowner_relationship": "Officer",
  "rptowner_title": "Chief Operating Officer",
  "transactions": [
    {
      "nonderiv_trans_sk": 1,
      "trans_date": "2025-06-15",
      "trans_code": "F",
      "trans_shares": 50000,
      "trans_priceper_share": 100,
      "trans_value": 5000000,
      "trans_acquired_disp_cd": "D",
      "shrs_ownd_folwng_trans": null,
      "superseded": false,
      "superseded_by": null
    }
  ],
  "transaction_count": 1
}

Other evidence reviewed

What this role may trade

Within the limit

Largest trade: $5,000,000Single-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_VruqStY8x2zvyxJqNSJEkJIE

get_applicable_role_limits({"relationship":"Officer","title":"Chief Operating 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_xyx1EB5NDJayiUPMajKy0UlY

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: $5,000,000Rolling limit: $50,000,000

Window ending: Jun 15, 2025
Transactions counted: 1
Shares withheld for tax: $5,000,000

View source result call_wvKmVoUyod3Mn336udh5S6fC

rolling_90d_trading_volume({"rptowner_cik":"9000000006","as_of_date":"2025-06-15"})

{
  "total_volume": 5000000,
  "sales_volume": 0,
  "purchases_volume": 0,
  "volume_by_code": {
    "F": 5000000
  },
  "transaction_count": 1,
  "rptowner_cik": "9000000006",
  "window_end": "2025-06-15",
  "window_days": 90,
  "accession_numbers": [
    "SCENARIO-0000000001-25-000006"
  ]
}

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_zdqd838F9xAFr82hPpr5dkLd

insider_trading_baseline({"rptowner_cik":"9000000006","as_of_date":"2025-06-15"})

{
  "rptowner_cik": "9000000006",
  "as_of_date": "2025-06-15",
  "lookback_days": 180,
  "transaction_count": 0,
  "message": "No prior transactions found in this window"
}

Was news about to come out?

No blackout window

No scheduled blackout window covers Jun 15, 2025.

View source result call_GbkwlO21aQ1i2SbxcokTimZE

get_material_events({"issuer_cik":"0000320193","on_date":"2025-06-15"})

{
  "issuer_cik": "0000320193",
  "on_date": "2025-06-15",
  "in_blackout": false
}

Total traded in the 90 days before

Within the limit

Total: $0Rolling limit: $50,000,000

Window ending: Jun 14, 2025
Transactions counted: 0

View source result call_nzMry96B0ay4ZMyinIU8CShl

rolling_90d_trading_volume({"rptowner_cik":"9000000006","as_of_date":"2025-06-14"})

{
  "rptowner_cik": "9000000006",
  "window_end": "2025-06-14",
  "window_days": 90,
  "total_volume": 0,
  "transaction_count": 0,
  "message": "No transactions found in this window"
}

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_bZkGnPTfiAFkthFhIujBxOiI

insider_trading_baseline({"rptowner_cik":"9000000006","as_of_date":"2025-06-14"})

{
  "rptowner_cik": "9000000006",
  "as_of_date": "2025-06-14",
  "lookback_days": 180,
  "transaction_count": 0,
  "message": "No prior transactions found in this window"
}

Finding

ClearConfidence: high10b5-1 status: not established

The investigation into SEC Form 4 filing SCENARIO-0000000001-25-000006 reveals that the insider, SCENARIO OFFICER SIX, conducted a transaction on June 15, 2025, involving the sale of 50,000 shares for $5,000,000. This transaction is within the single trade limit of $10,000,000 and the rolling 90-day limit of $50,000,000 for an executive officer. There were no prior transactions in the 90-day or 180-day lookback periods, indicating no unusual trading patterns. Additionally, there were no blackout periods or material events restricting the transaction. Therefore, the transaction complies with insider trading regulations.

Exculpatory factors

tax withholding (transaction 1)
below all thresholds (transaction 1)

Grounding: 7/9 claims supported, confidence: low, 2 unsupported. Unverified claims remain: human review required

Claims check

The insider, SCENARIO OFFICER SIX, conducted a transaction on June 15, 2025, involving the sale of 50,000 shares for $5,000,000.
The tool result confirms a transaction on June 15, 2025, involving 50,000 shares for $5,000,000.
call_C3vwOpe7A5CJmDcZ1hotYwna
This transaction is within the single trade limit of $10,000,000 for an executive officer.
The tool result states the single trade limit is $10,000,000, which supports the claim.
call_VruqStY8x2zvyxJqNSJEkJIE
This transaction is within the rolling 90-day limit of $50,000,000 for an executive officer.
The tool result confirms the rolling 90-day limit is $50,000,000, supporting the claim.
call_VruqStY8x2zvyxJqNSJEkJIE call_wvKmVoUyod3Mn336udh5S6fC
There were no prior transactions in the 90-day lookback period, indicating no unusual trading patterns.
The tool result indicates no transactions in the 90-day lookback period.
call_zdqd838F9xAFr82hPpr5dkLd call_nzMry96B0ay4ZMyinIU8CShl
There were no prior transactions in the 180-day lookback period, indicating no unusual trading patterns.
The tool result confirms no transactions in the 180-day lookback period.
call_zdqd838F9xAFr82hPpr5dkLd call_bZkGnPTfiAFkthFhIujBxOiI
There were no blackout periods restricting the transaction.
The tool result indicates there were no blackout periods on the transaction date.
call_GbkwlO21aQ1i2SbxcokTimZE
There were no material events restricting the transaction.
The tool result does not mention material events, only blackout periods.
call_GbkwlO21aQ1i2SbxcokTimZE
Therefore, the transaction complies with insider trading regulations.
No tool call is cited to support this compliance conclusion.
Cites no evidence
The transaction was reported under SEC Form 4 filing SCENARIO-0000000001-25-000006.
The tool result confirms the transaction was reported under the specified SEC Form 4 filing.
call_C3vwOpe7A5CJmDcZ1hotYwna

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
The finding claims no exemption.
None claimed

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 Tax line next to a large sale.

Reasons for concern

What could explain it

Answer key

AI investigator

What the safeguards reported

What decides this case

The trade as filed

Other evidence reviewed

What this role may trade

Firm rules checked

Total traded in the 90 days before

Their own trading history

Was news about to come out?

Total traded in the 90 days before

Their own trading history

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

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