Insider Trading Prohibition Act

Insider Trading Prohibition Act

This bill generally provides statutory authority for the prohibition against securities trading, as well as related communications to others, by a person aware of material, nonpublic information. The bill further provides, for purposes of establishing a violation of this prohibition, that it is not necessary for such a person to know specifically how such information was obtained or whether a personal benefit was paid or promised.   

Bill 117 HR 2655, also known as the Insider Trading Prohibition Act, is a piece of legislation introduced in the US Congress with the aim of preventing insider trading in the stock market. Insider trading occurs when individuals with access to non-public information about a company use that information to make trades and profit off of it, which is considered illegal and unethical.

The bill seeks to clarify and strengthen existing laws related to insider trading by explicitly defining what constitutes insider trading and providing clear guidelines for enforcement. It also aims to increase transparency and accountability in the financial markets by requiring individuals who trade securities to disclose any material non-public information they possess.

Additionally, the Insider Trading Prohibition Act includes provisions to enhance the Securities and Exchange Commission's (SEC) ability to investigate and prosecute insider trading cases. This includes granting the SEC the authority to seek civil penalties against individuals found guilty of insider trading, as well as providing protections for whistleblowers who report insider trading violations. Overall, the Insider Trading Prohibition Act is designed to protect investors and ensure a level playing field in the stock market by cracking down on illegal insider trading practices. It is currently being debated in Congress, with supporters arguing that it is necessary to maintain the integrity of the financial markets, while opponents raise concerns about potential unintended consequences and the need for further clarification on certain aspects of the bill.