The New Insider Trading

Insider trading is back in the news, although some would argue it never left. Last month, the U.S. House of Representatives passed the Insider Trading Prohibition Act, which seeks to create a new provision, Section 16A of the 1934 Securities Exchange Act, devoted to banning the trading of securities while “aware of material nonpublic information.”  If the bill is enacted, it would represent the first time the phrase “insider trading” has been defined by congressional statute.  Typically,  charges of insider trading are brought under Section 10(b) and the SEC’s Rule 10b-5, which does not mention the term “insider trading” but … Read more