Section 1 Short title
This Act may be cited as the “Stop Illegal Insider Trading Act”.
Stop Illegal Insider Trading Act
A BILL
To strengthen the prohibitions on insider trading, and for other purposes.
Sec. 2 Strengthening the prohibition on insider trading
Section 10 of the Securities Exchange Act of 1934 (15 U.S.C. 78j) is amended—
in the matter immediately preceding the flush text at the end of the section, by inserting at the end the following:
“(d)
“(1)
“(A) To purchase, sell, or cause the purchase or sale of any security on the basis of material information that the person knows or has reason to know is not publicly available.
“(B) To knowingly or recklessly communicate material information that the person knows or has reason to know is not publicly available to any other person under circumstances in which it is reasonably foreseeable that such communication is likely to result in a violation of subparagraph (A).
“(2) For purposes of this subsection, the term “not publicly available” shall not include information that the person has independently developed from publicly available sources.
“(3) The Commission may, by rule, exempt any person, transaction, or communication, or any class of persons, transactions, or communications from the prohibitions under this subsection, if the Commission determines that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors.
“(4) Nothing in this subsection shall be construed to affect liability under subsection (b).”
in the flush text at the end of the section—
by striking “Rules promulgated” and inserting “Subsection (d) and rules promulgated”; and
by inserting “or subsection (d)” after “subsection (b)” each place that term appears.