,i  #aad? ,,congress  #a/ ,session  ,h4 
,r4 #afbe  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,m>* #be1 #bjae ,mr4  
,himes 7= himself1 ,mr4 ,womack1 ,mrs4  
,c>olyn ,b4 ,maloney ( ,new ,york1 &    
,mr4 ,cleav]7 introduc$ ! foll[+ bill2  
:i* 0 ref]r$ to ! ,committee on         
,f9ancial ,s]vices  ,a ,,bill  ,to am5d 
! ,securities ,ex*ange ,act ( #aicd to  
prohibit c]ta9 securities trad+ & relat$
 communications by ^? :o possess        
mat]ial1 nonpublic in=mation4  #a4 ,%ort
 title ,?is ,act may be cit$ z ! ,insid]
 ,trad+ ,prohibition ,act4  #b4         
,prohibition on insid] trad+  7a7 ,9    
g5]al ,! ,securities ,ex*ange ,act (    
#aicd 7#ae ,u4,s4,c4 #gh;a et seq47 is  
am5d$ by add+ aft] section #af ! foll[+ 
new section3  #af;,a4 ,prohibition on   
insid] trad+  7a7 ,prohibition aga9/    
trad+ securities :ile 9 possession (    
mat]ial1 nonpublic in=mation ,x %all be 
unlawful = any p]son1 directly or       
indirectly1 to pur*ase1 sell1 or ent]   
into1 or cause ! pur*ase or sale ( or   

entry into1 any security1 security-bas$ 
swap1 or security-bas$ swap agreem5t1   
:ile 9 possession ( mat]ial1 nonpublic  
in=mation relat+ to su* security1       
security-bas$ swap1 or security-bas$    
swap agreem5t1 or relat+ to ! m>ket =   
su* security1 security-bas$ swap1 or    
security-bas$ swap agreem5t1 if su*     
p]son kn[s1 or recklessly disreg>ds1 t  
su* in=mation has be5 obta9$ wrongfully1
 or t su* pur*ase1 sale1 or entry w\ld  
con/itute a wrongful use ( su*          
in=mation4  7b7 ,prohibition aga9/ !    
wrongful communication ( c]ta9 mat]ial1 
nonpublic in=mation ,x %all be unlawful 
= any p]son ^: own pur*ase or sale ( a  
security1 security-bas$ swap1 or entry  
into a security-bas$ swap agreem5t w\ld 
violate subsection 7a7 7ref]r$ to 9 ?is 
subsection z ! #8communicat+ p]son'71   
wrongfully to communicate mat]ial1      
nonpublic in=mation relat+ to su*       
security1 security-bas$ swap1 or        
security-bas$ swap agreem5t1 or relat+  
to ! m>ket = su* security1 security-bas$

 swap1 or security-bas$ swap agreem5t1  
to any o!r p]son if--  7#a7 ! o!r       
p]son-- 7,a7 pur*ases1 sells1 or causes 
! pur*ase or sale (1 any security or    
security-bas$ swap or ent]s into or     
causes ! entry into any security-bas$   
swap agreem5t1 to :i* su* communication 
relates2 or  7,b7 communicates !        
in=mation to ano!r p]son :o makes or    
causes su* a pur*ase1 sale1 or entry    
:ile 9 possession ( su* in=mation2 &    
7#b7 su* a pur*ase1 sale1 or entry :ile 
9 possession ( su* in=mation is         
reasonably =eseeable4  7c7 ,/&>d & k    
requirem5t  7#a7 ,/&>d ,= purposes ( ?is
 section1 trad+ :ile 9 possession (     
mat]ial1 nonpublic in=mation "u         
subsection 7a7 or communicat+ mat]ial   
nonpublic in=mation "u subsection 7b7 is
 wrongful only if ! in=mation has be5   
obta9$ by1 or its communication or use  
w\ld con/itute1 directly or indirectly--
 7,a7 !ft1 brib]y1 misrepres5tation1 or 
espionage 7?r\gh electronic or o!r      
means72  7,b7 a violation ( any ,f$]al  

law protect+ comput] data or !          
intellectual prop]ty or privacy (       
comput] us]s2 or  7,c7 conv]sion1       
misappropriation1 or o!r unau?oriz$ &   
deceptive tak+ ( su* in=mation1 or a    
brea* ( any fiduci>y duty or any o!r    
p]sonal or o!r relation%ip ( tru/ &     
confid5ce4  7#b7 ,k requirem5t ,x %all n
 be necess>y t ! p]son trad+ :ile 9     
possession ( su* in=mation 7z proscrib$ 
by subsection 7a771 or mak+ !           
communication 7z proscrib$ by subsection
 7b771 "k ! specific means by :i* !     
in=mation 0 obta9$ or communicat$1 or   
:e!r any p]sonal b5efit 0 paid or       
promis$ by or to any p]son 9 ! *a9 (    
communication1 s long z ! p]son trad+   
:ile 9 possession ( su* in=mation or    
mak+ ! communication1 z ! case may be1 0
 aw>e1 or recklessly disreg>d$ t su*    
in=mation 0 wrongfully obta9$ or        
communicat$4  7d7 ,d]ivative liability  
,except z provid$ 9 section #bj7;a71 no 
p]son %all be liable "u ?is section     
solely by reason ( ! fact t su* p]son   

controls or employs a p]son :o has      
violat$ ?is section1 if su* controll+   
p]son or employ] did n p>ticipate 91    
pr(it f1 or directly or indirectly      
induce ! acts con/itut+ ! violation (   
?is section4  7e7 ,exempt$ transactions 
,! ,commission may1 by rule1 exempt any 
p]son1 security1 or transaction1 or any 
class p]sons securities1 or             
transactions1 f any or all ( !          
provisions ( ?is section1 ^u su* t]ms & 
conditions z x consid]s necess>y or     
appropriate1 if ! ,commission det]m9es t
 su* action is n inconsi/5t ) ! purposes
 ( ?is section4 ,! prohibitions ( ?is   
section %all n apply to any p]son :o    
acts at ! specific direction (1 & solely
 = ! acc\nt (1 a p]son ^: own securities
 trad+1 or communications ( mat]ial1    
nonpublic in=mation1 w\ld be lawful "u  
?is section4  4  7b7 ,con=m+ am5dm5ts ,!
 ,securities ,ex*ange ,act ( #aicd 7#ae 
,u4,s4,c4 #gh;a et seq47 is fur!r       
am5d$--  7#a7 9 section #ba7;d77#b71 by 
ins]t+ or section #af;,a1 aft] section  

#aj7;b7 ( ?is title2  7#b7 9 section    
#ba;,a--  7,a7 9 subsection 7g77#a71 by 
ins]t+ & section #af;,a1 aft] !reund]12 
&  7,b7 9 subsection 7h77#a71 by ins]t+ 
& section #af;,a1 aft] !reund]12 &  7#c7
 9 section #ba;,c7f71 by ins]t+ or      
section #af;,a1 aft] section #aj7;b74