Insider Trading Prohibition Act

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Introduced

In Committee

Passed One Chamber

Passed Both Chambers

Signed into Law

Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (Sponsor introductory remarks on measure: CR S4520-4521)

Makes it explicitly illegal to trade stocks using secret, wrongfully obtained information

This bill would make it explicitly illegal for people to trade stocks or other investments using secret, wrongfully obtained information. It would also ban sharing that secret information if it leads to illegal trades. This aims to create clearer rules for everyone involved in the stock market.

What Would Change

Today, insider trading is primarily addressed through general anti-fraud rules and court interpretations. This bill would add a specific, explicit law to the Securities Exchange Act of 1934. This law would clearly prohibit trading with, or communicating, wrongfully obtained secret, important information about stocks or other investments.

Key Provisions

Bans trading stocks or other investments if you have secret, important information that was wrongfully obtained.
Bans sharing secret, important information if it was wrongfully obtained and leads to illegal trades by others.
Defines "wrongful" information as that obtained through theft, bribery, spying, or breaking a special trust for personal gain.
Clarifies that a person does not need to know the exact way the information was wrongfully obtained, only that it was.
Protects pre-planned trading arrangements that follow existing federal rules (Rule 10b5-1) from these new prohibitions.
Lets the Securities and Exchange Commission create new rules and grant exemptions from these prohibitions for certain situations.

View on Congress.gov

S 5320 · 119th Congress · AI Summary by gemini-2.5-flash · 9/10

Insider Trading Prohibition Act

What Would Change

Key Provisions

Lobbying Activity