Insider Trading Prohibition Act

This bill would add a new section to the Securities Exchange Act of 1934 that makes insider trading illegal by law. It would bar people from buying or selling securities or security-based swaps when they know, or recklessly ignore, that they hold material, nonpublic information that was obtained or used wrongfully. It would also bar passing such information to others who then trade on it. "Wrongful" is defined to include theft, bribery, misrepresentation, hacking, misappropriation, or a breach of duty to shareholders for personal benefit, including tipping a relative or friend. The Securities and Exchange Commission could grant exemptions, and trades that follow existing Rule 10b5-1 trading plans would not be covered.

Full text and official record on Congress.gov

Sponsors

• Jack Reed Democrat sponsor
• 4 cosponsors