House Passes 1st Explicit Ban On Insider Trading

Law360, Washington (December 5, 2019, 8:01 PM EST) -- The U.S. House of Representatives on Thursday overwhelmingly approved a bill that would explicitly prohibit insider trading, empowering enforcement authorities and clarifying a murky area of securities law.

The chamber approved the Insider Trading Prohibition Act on a 410-13 vote. The six-page measure sponsored by Rep. Jim Himes, D-Conn., would ban a trader from buying or selling securities "while in possession of material, nonpublic information ... if such person knows, or recklessly disregards, that such information has been obtained wrongfully." It also outlaws passing along private information that could enable insider trading while shielding employers from derivative liability for wrongdoing by...