The House on Thursday passed a bill to explicitly ban making financial trades based on confidential information, a process commonly known as insider trading.
Lawmakers approved the Insider Trading Prohibition Act by a near unanimous 410 to 13 vote, with just 12 Republicans and independent Rep. Justin AmashJustin AmashHillicon Valley: House passes anti-robocall bill | Senators inch forward on privacy legislation | Trump escalates fight over tech tax | Illinois families sue TikTok | Senators get classified briefing on ransomwareHouse passes anti-robocall bill Pressure grows on House GOP leaders to hold line ahead of impeachment trialMORE (Mich.) opposing the bill.
If passed by the Senate, the bill would create the first direct ban on insider trading. Such transactions typically involve a person buying or selling shares of a company based on nonpublic information that will substantially affect the stock price upon release.
While federal regulators and law enforcement agencies commonly prosecute and convict individuals alleged to have traded on nonpublic information, defendants are typically accused of bank fraud, write fraud or other explicit crimes.
The bill is the latest congressional effort to crack down on insider trading both nationally and within the halls of Congress. Despite their immense influence over U.S. commerce, lawmakers have few limits on the makeup of their financial portfolios as long as they disclose their assets.
Former Rep. Chris CollinsChristopher (Chris) Carl CollinsDuncan Hunter pleads guilty after changing pleaOn The Money: Economy adds 136K jobs in September | Jobless rate at 50-year low | Treasury IG to probe handling of Trump tax returns request | House presses Zuckerberg to testify on digital currencyTwo Collins associates plead guilty in insider trading caseMORE (R-N.Y.) pleaded guilty in October to conspiring to commit securities fraud and making false statements after he was indicted in 2018 on eleven charges related insider trading of shares of an Australian pharmaceutical company.
Prosecutors alleged that Collins, who had served on the companys board of directors, gave nonpublic information about drug trial results to his son to help him “make timely trades in Innate stock and tip others.”
Collins was unable to sell his shares of the company, Innate Immunotherapeutics, and lost roughly $17 million after damaging test results were announced. But his son allegedly avoided more than $570,000 in losses because of the alleged tip from the congressman.
Multiple Republican lawmakers told The Hill in 2018 that Collins had boasted about making money for other members of Congress by urging them to invest in the company.
The late Rep. Louise SlaughterDorothy (Louise) Louise SlaughterSotomayor, Angela Davis formally inducted into National Women’s Hall of FameSeven Republicans vote against naming post office after ex-Rep. Louise SlaughterBreaking through the boys clubMORE (D-N.Y.), asked the Securities and Exchange Commission (SEC) and federal prosecutors in 2017 to investigate Collins under the STOCK Act, a 2012 she authored banning members of Congress from insider trading.