Hang them.
Insider sales at RACK are more egregious than I have ever seen in over 30 years in the industry. Most insider sales are done in the open market. I challenge anyone to show me where management and founders are permitted by the Investment Bankers to take over 40% of the IPO proceeds and then take over 56% of two additional follow-on offerings within nine months. These were not open market Rule 144 sales as is normally the case after IPO share lock-ups.
Rule 144 was specifically set up to protect the public and limit insider selling.

http://www.sec.gov/investor/pubs/rule144...

Shares issued from stock options are normally restrcited shares and thus subject to Rule 144. Under Rule 144 insiders must hold shares for 12 months. After 12 months, they can only sell the lesser of 1% of the shares outstanding or 1% of the average volume for the last 4 weeks. They cannot sell 30 days before or 30 days after earnings, so there are only 4-30 day periods during the year that they can sell. Now there are exceptions, for "planned sales" but that is basic guidlines set up by the SEC.
Under Rule 144 insiders at RACK would not have been allowed to sell until June 9, 2006. However, the two follow-on offerings gave insiders a chance to register their shares and sell shares in 6 and 9 months. Furthermore four week average daily volume preceding those secondary offerings was 429K and 545K. Meaning that even under Rule 144, Barton would have been able to sell 4290 shares/day in December and 5450 shares at a time in March (Had he held them for one year). However, thanks to the Bankers he sold 372,000 shares in December and 275,000 shares in March. If December was a "window" 30 day period (and it was not) and if Barton had sold the maximum amount under Rule 144 by selling evry day for 30 days, he could have sold a total of 128,700 shares. In March, which was also not a "window", he would have been restricted to selling 163,500 shares. The same numbers apply to Ford, founders sold even more. Obviously 30 transactions in 30 days would have triggered every insider sale service "off the chart"
Also Rule 144 clearly state that:
"The sales must be handled in all respects as routine trading transactions, and brokers may not receive more than a normal commission. Neither the seller nor the broker can solicit orders to buy the securities."
Obviously the secondary offerings allowed the Bankers to make much greater than the normal commission. In December Barton paid $1.95 a share or $536,000 to sell 372,000 shares. A "normal commission would have been less than $4,000. Insiders paid a total of $8,117,850 to sell shares in March. In December, insiders paid $.95 per share or $2,470,000 in fees.
The December offering was 68% insider and 32% to the Company. The March offering was 56% insiders and 44% company sales. And that is after insiders and founders got 40% of the IPO funds.
This is CRIMINAL. I challange anyone to show me a company that has this level of insider selling within 9 months of the IPO. As I have stated before insiders have now taken over $450,000,000 out of this little company. And the Bankers have made millions helping them skirt Rule 144. Call Spitzer.