Feb 27 2019
WASHINGTON – Today U.S. Senators Chris Van Hollen (D-Md.) and Deb Fischer (R-Neb.) introduced the bipartisan Promoting Transparent Standards for Corporate Insiders Act. The U.S. Securities and Exchange Commission (SEC) prohibits the purchase or sale of securities based on non-public information. Right now, the SEC allows executives to create a trading plan that ensures trades are done without taking advantage of inside information. However, as two high-profile cases illustrate, some dishonest players may be abusing loopholes in the system. This bill requires the SEC to study this issue, report their findings to Congress, and write additional rules addressing the ability of people to take advantage of the system.
The bill has also been introduced in the U.S. House of Representatives by Financial Services Chairwoman Maxine Waters (D-Calif.) and Ranking Member Patrick McHenry (R-N.C.). It will be the part of the discussion at Thursday’s Senate Banking Committee hearing on capital formation and corporate governance.
“This bipartisan legislation will help ensure that corporate insiders are following the same rules as everyone else. By studying and modifying SEC Rule 10b5-1, the SEC can make changes that will ensure this rule can’t be used by individuals to shield themselves from liability when they do trade on insider information. I urge action on the bill without delay,” said Senator Van Hollen.
“Nebraskans who are investing to save for retirement or send their kids to college should receive a fair shake. Our bipartisan legislation will increase transparency in corporate trading to help weed out bad actors who take advantage of the current system. This is a common-sense solution that will level the playing field for hardworking American families and businesses on Main Streets,” said Senator Fischer.