Corporate insiders include corporate officers (CEO’s, CFO’s, etc.), members of the board of directors, and beneficial owners of more than 10% of a class of a company’s equity securities.

It has always been perfectly legal for an officer or director to buy or sell stock in the company he or she works for as long as they do so without the benefit of non-public information. As part of the 2002 Sarbanes- Oxley Act, insiders are required to report their transactions within two business days to the Securities and Exchange Commission, via SEC Form 4. In addition, the SEC mandates that an insider must hold the stock that they purchase in the open market for a minimum of six months before selling it. If they do in fact sell prior to that six month date, they must forfeit the profits to the company. The same rule applies to insiders selling stock, prohibiting them from repurchasing shares within six months.

The GSS Insider Research Team utilizes a performance-oriented institutional research database that monitors daily insider filings. The research database includes insider activity beginning on July 30, 2003, when the SECmandated electronic filing requirement of corporate insider transactions became effective. The GSS Research Team reviews each transaction’s related SEC Form 4 filing.

While we have access to all insider sale and option related transaction detail from the SEC’s Edgar database, our research has shown this type of activity to be less reliable indicators of insider sentiment than insider purchases. Because insiders receive a large part of their compensation in the form of options and/ or grants, they sell their own stock far more often than they buy it. They may also be looking to diversify their portfolio, or pay for other expenses (a new house, college, etc.).

While Yahoo Finance, MSN and other financial web sites do provide transaction detail, they DO NOT provide performance details, which is a core component of our research.

Our research shows that, on average, the optimal period of performance subsequent an insider’s purchase is 12 months. Insider purchases made just days or weeks before sharp price movements are unusual due to regulatory restrictions.

The GSS Insider Research Team has more than twenty years of combined experience analyzing the buying behavior of corporate insiders.

By opening a traditional brokerage account with Garden State Securities, Inc., investors can gain access to GSS Corporate Insider Research.

Please visit our web site at www.gardenstatesecurities.com/gssinsiderresearch.aspx for more information or contact us directly at 877-477-7862.