A Bipartisan Start in Financial Services
The House Financial Services Committee started 2019 on a unified note with the introduction of bipartisan legislation aimed at combating illegal insider trading. Chair Maxine Waters (D-CA-43) and Ranking Member Patrick McHenry (R-NC-10) had previously co-sponsored the legislation last summer, yet it never made it out of Congress.
The legislation, known as the “Promoting Transparent Standards for Corporate Insiders Act,” or H.R. 624, would require the Securities and Exchange Commission (SEC) to consider amending its rules around executive investment plans. The bill would create a commission that would conduct a year-long study on these types of investment plans and would report its findings to Congress.
“Our bill, the Promoting Transparent Standards for Corporate Insiders Act, will play a critical role in holding corporate executives accountable and improving SEC Rule 10b5-1, which currently allows corporate insiders to avoid accusations of illegal insider trading,” said Waters. “It would require the SEC to study how to amend its rule to address reported incidents of manipulation, report to Congress, and write rules consistent with the results of the study.”
Rep. McHenry added, “Cracking down on fraud and abuse within our financial system is apolitical. I am glad to join Chairwoman Waters in this meaningful effort to help the SEC better understand illicit insider trading.”