Insider Trading Policy

 

Securities Trades by Personnel of Interleukin Genetics, Inc. and its Subsidiaries

Interleukin Genetics, Inc. (the “Company”) has adopted the following policy regarding trading by Company personnel in the Company’s securities.  It applies to all Company personnel, including directors, officers, employees and consultants of the Company and its subsidiaries.

The Need For A Policy Statement

     This Policy Statement has been developed:

     • To educate all Company personnel;
     • To set forth guidelines for courses of action;
     • To protect the Company and all of its personnel against legal liability; and
     • To preserve the reputation of the Company and its personnel for integrity and ethical conduct.

Because the Company is a public company, transactions in the Company’s securities are subject to the federal securities laws and regulations adopted by the United States Securities and Exchange Commission, or the SEC.  These laws and regulations make it illegal for an individual to buy or sell securities of the Company while aware of "inside information."  The SEC takes insider trading very seriously and devotes significant resources to uncovering the activity and to prosecuting offenders.  Liability may extend not only to the individuals who trade on "inside information," but also to their "tippers," people who leak the inside information to the individuals who trade.  The Company and "controlling persons" of the Company may also be liable for violations by Company employees.

In addition to responding to the statutes and regulations, we are adopting this policy to avoid even the appearance of improper conduct on the part of anyone employed by or associated with the Company (not just so-called insiders).

The Consequences

The consequences of insider trading violations can be severe:

For individuals who trade on inside information (or tip information to others):

     • A civil penalty of up to three times the profit gained or loss avoided;
     • A criminal fine (no matter how small the profit) of up to $5 million; and
     • A jail term of up to twenty years.

These penalties can apply even if the individual is not a member of the Board of Directors or an officer of the Company. Moreover, if an employee violates our insider trading policy, Company-imposed sanctions, including dismissal for cause, could result from failing to comply with the Company's policy or procedures.

For a Company (as well as possibly any supervisory person) that fails to take appropriate steps to prevent illegal trading:

     • A civil penalty of the greater of $1 million or three times the profit gained or loss avoided as a result of the employee's violation; and
     • A criminal penalty of up to $25 million.

Any of the above consequences -- even an SEC investigation that does not result in prosecution -- can tarnish one's reputation and irreparably damage a career.

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