Insider Trading Prohibition Act
Sponsored By: Senator Reed, Jack [D-RI]
Introduced
Summary
This bill would add a new Section 16A to the Securities Exchange Act to create a broad federal ban on wrongful insider trading and on wrongfully sharing material, nonpublic information (MNPI). It targets anyone who trades or causes trading while aware or recklessly disregarding that the information is material, nonpublic, or wrongfully obtained.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 2 benefits, 0 costs, 1 mixed.
Ban on trading using secret tips
If enacted, the bill would ban buying, selling, or entering security trades when a person has material, nonpublic information and knows or recklessly ignores that fact. It would also ban wrongfully passing that information if the sharer knows or recklessly ignores it will cause someone to trade and the recipient trades. "Wrongful" getting or sharing would include theft, bribery, lying, spying, hacking, violating computer or privacy laws, misappropriation, or breaching a fiduciary duty for personal benefit, including gifts to friends or relatives. Remedies under the new section would be in addition to other legal or equitable claims.
SEC exemption and safe harbor rules
If enacted, the bill would let the Securities and Exchange Commission exempt any person, security, or trade from the new insider-trading ban by rule or order. The SEC could set terms and conditions for any exemption. The bill would also say the ban does not apply to trades that meet Rule 10b5-1 or any successor rule, creating a carve-out for preplanned trading plans.
Add new insider rule to Exchange Act
If enacted, the bill would insert a new Section 16A into the Securities Exchange Act and add references to it across related provisions. This would put the new insider-trading prohibition into the Act's definitions, enforcement, penalty, and whistleblower rules. The change is mainly technical to help regulators and whistleblowers use the new rule.
Sponsors & CoSponsors
Sponsor
Reed, Jack [D-RI]
RI • D
Cosponsors
Sen. Van Hollen, Chris [D-MD]
MD • D
Sponsored 8/6/2026
Sen. Kim, Andy [D-NJ]
NJ • D
Sponsored 8/6/2026
Sen. Alsobrooks, Angela D. [D-MD]
MD • D
Sponsored 8/6/2026
Sen. Blunt Rochester, Lisa [D-DE]
DE • D
Sponsored 8/6/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov