Jones Soda in the clear with the SEC

Back in August, there was speculation about insider trading on the part of directors at Jones Soda (NASDAQ: JSDA), a then high-flying seller of premium carbonated beverages.

During an 85-day period this spring, five directors sold nearly all of their shares in the company. The stock is about 67% off the high it reached during that period. According to the Seattle-Post Intelligencer, "If the board members and executives had made the trades Monday, when the stock closed at $10.74 on the Nasdaq stock market, they would have gotten a combined $3.6 million, or 45 percent less than what they received."

At the time, I wondered whether it was insider trading, or just plain good timing. Many observers, including our own Sarah Gilbert, had been wondering if the stock had overheated and was trading based on irrational expectations rather than valuation.

Writing about the Jones Soda insiders, I wonder about what directors are supposed to do when they think they hold overvalued stock: "Does she have some moral obligation to hold the stock, or should she try to dump it before it plummets as investor exuberance subsides?"

In any case, the SEC has terminated its informal investigation of the trades, and the directors will get to keep their well-timed trading gains -- that was more than 50% higher than its current price.