Waters and McHenry Introduce Bipartisan Legislation to Curb Illegal Insider Trading

WASHINGTON, D.C. - Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, and Congressman Patrick McHenry (R-NC), Ranking Member of the House Committee on Financial Services, announced the introduction of H.R. 624, the Promoting Transparent Standards for Corporate Insiders Act, bipartisan legislation which requires the Securities and Exchange Commission (SEC) to consider certain types of amendments to Rule 10b5-1 that would ensure corporate insiders are unable to indirectly engage in illegal insider trading through changes to their trading plans.

"I am happy to work with Ranking Member McHenry on the first of what I hope will be many bipartisan bills to strengthen consumer and investor protections in the 116th Congress," said Chairwoman Waters. "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. 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. It should be a top priority for regulators to ensure clear guidelines and robust enforcement of illicit activities, such as insider trading, and this legislation will serve as a driving force to hold regulators and bad actors accountable."

“Cracking down on fraud and abuse within our financial system is apolitical,” said Ranking Member McHenry. “I am glad to join Chairwoman Waters in this meaningful effort to help the SEC better understand illicit insider trading. 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.”

H.R. 624 is supported by the Council for Institutional Investors and Public Citizen.

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