Bill · S. 5320· Senate(119-S-5320)
Insider Trading Prohibition Act
- Introduced
- 8/6/2026
- Last activity
- 8/6/2026 — Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (Sponsor introductory remarks on measure: CR S4520-4521)
- Sponsored by
- John Reed
- Cosponsors
- - 4 - 0
- Introduced
- In Committee
What this bill would do
The Insider Trading Prohibition Act seeks to amend the Securities Exchange Act of 1934. It introduces a new section to prohibit trading securities or security-based swaps while in possession of material, nonpublic information. The bill also bans the wrongful communication of such information to others. It defines wrongful actions to include theft, bribery, or breaches of fiduciary duty. Additionally, the act establishes specific standards for knowledge and provides for certain affirmative defenses.
Yes· 3 of 7
Does this give people more protection from unfair business practices?+6
The bill protects all investors from unfair advantages gained through material, nonpublic information.
Is this likely to grow the economy?+5
By ensuring market integrity and fairness, the bill helps maintain investor confidence which supports long-term economic growth.
Does this give people more control over their personal data?+4
The bill includes protections against the misuse of computer data and privacy-related information in the context of trading.
The opposite· 3 of 6
Would high-income households be better off under this?-3
The bill may restrict trading strategies or information access available to highly successful professionals.
Would people with substantial wealth be better off under this?-3
Increased regulations on material nonpublic information may restrict personal wealth management tactics.
Would the very wealthiest people be better off under this?-3
Heightened scrutiny and broader standards of liability could affect high-level financial transactions.
Who it would affect, and how
Potential Positive Impacts for People
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Prohibition on Trading with Nonpublic Information: Under Section 2(a), it would be unlawful for persons to trade securities or swaps if they have access to material, nonpublic information that was obtained wrongfully. This aims to stop unfair advantages in the market.
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Prohibition on Wrongful Communication: Per Section 2(b), the bill prevents people from wrongfully communicating material, nonpublic information to others for the purpose of trading. This targets those who pass on sensitive information to influence others' trades.
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Addressing Breaches of Fiduciary Duty: Section 2(c)(1)(D) defines wrongful trading to include a breach of fiduciary duty to shareholders for personal benefit, such as a gift of confidential information to a relative or friend. This protects shareholders from those who misuse their position for private gain.
Potential Negative Impacts for People
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Broad Standard for Knowledge: Under Section 2(a) and Section 2(c)(2), the law applies if a person "recklessly disregards" that information is material, nonpublic, or obtained wrongfully. This means a person could be held liable even if they did not have specific knowledge of how the information was obtained.
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Broad Scope of Communication: Section 2(b) creates a prohibition on communicating information that would result in a purchase or sale. This could impact those communicating information if they are aware, or recklessly disregard, that such a communication would lead to a trade.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Economy And Finance
- Improves Consumer Protection+6Improves Economic Growth+5
- Demographic And Interest Groups
- Good For Middle Class Households+2Good For Retirees+2Good For Billionaires-3Good For High Income Households-3Good For High Net Worth Individuals-3Good For Ultra High Net Worth Individuals-3
- Education And Technology
- Improves Data Privacy+4
- Governance And Ideology
- Increases Federal Power+3Improves Government Transparency+2Improves Freedom Of Speech-2Improves Due Process-1
- 8/6/2026
- Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (Sponsor introductory remarks on measure: CR S4520-4521)
- 4 Cosponsors added.
- Introduced in Senate
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.
Angela AlsobrooksDemocrat · Maryland
Lisa Blunt RochesterDemocrat · Delaware
Andy KimDemocrat · New Jersey
Chris Van HollenDemocrat · Maryland