Reps. Patrick McHenry (R-NC) and Maxine Waters (D-CA) introduced last week legislation designed to address insider trading by ensuring corporate insiders inability to engage in the practice via trading plan changes.
The Promoting Transparent Standards for Corporate Insiders Act would enable the government to address fraud and abuse within the nation’s financial system.
“I am glad to join Chairwoman Waters in this meaningful effort to help the SEC better understand illicit insider trading,” McHenry, ranking member of the House Committee on Financial Services, said. “I look forward to working with the Chairwoman, and the Financial Services Committee as a whole, to explore ways to improve federal government oversight and protect American investors.”
Waters, chair of the House Committee on Financial Services, said she is hopeful the measure serves as the first of many bipartisan bills to strengthen consumer and investor protections in the 116th Congress.
“Our bill 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,” Waters said. “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.”
Waters said it should be a top priority for regulators to ensure guidelines and enforcement of illicit activities, such as insider trading and noted the legislation would serve as a driving force to hold regulators accountable.