Ban On Insider Trading During '8-K Gaps' Heads To Senate

Law360 (January 13, 2020, 8:37 PM EST) -- The House overwhelmingly passed a bill Monday that would prohibit stock trades by company leaders during the window between a major corporate event and its public disclosure, closing what lawmakers call a loophole that facilitates insider trading.

The 8-K Trading Gap Act, approved 384-7, would require public companies to stop executives and directors from trading company stock before reporting significant events on U.S. Securities and Exchange Commission Form 8-K. Covered events include bankruptcies, data breaches, mergers and acquisitions, agreements with customers and suppliers, and leadership changes. SEC rules allow up to four days for reporting, theoretically giving corporate leaders time to...

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