#aafth ,,congress #ast ,session ,h4 ,r4 #becd ,,an ,,act ,to amend the ,securities ,exchange ,act of #aicd to prohibit certain securities trading and related communications by those who possess material1 nonpublic information4 #a ,short title ,this ,act may be cited as the ,insider ,trading ,prohibition ,act4 #b4 ,prohibition on insider trading 7a7 ,in general ,the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq47 is amended by inserting after section #af the following new section3 #af;,a4 ,prohibition on insider trading 7a7 ,prohibition against trading securities while aware of material1 nonpublic information ,it shall be unlawful for any person1 directly or indirectly1 to purchase1 sell1 or enter into1 or cause the purchase or sale of or entry into1 any security1 security-based swap1 or security-based swap agreement1 while aware of material1 nonpublic information relating to such security1 security-based swap1 or security-based swap agreement1 or any nonpublic information1 from whatever source1 that has1 or would reasonably be expected to have1 a material effect on the market price of any such security1 security-based swap1 or security-based swap agreement1 if such person knows1 or recklessly disregards1 that such information has been obtained wrongfully1 or that such purchase or sale would constitute a wrongful use of such information4 7b7 ,prohibition against the wrongful communication of certain material1 nonpublic information ,it shall be unlawful for any person whose own purchase or sale of a security1 security-based swap1 or entry into a security-based swap agreement would violate subsection 7a71 wrongfully to communicate material1 nonpublic information relating to such security1 security-based swap1 or security-based swap agreement1 or any nonpublic information1 from whatever source1 that has1 or would reasonably be expected to have1 a material effect on the market price of any such security1 security-based swap1 or security-based swap agreement1 to any other person if-- 7#a7 the other person-- 7,a7 purchases1 sells1 or causes the purchase or sale of1 any security or security-based swap or enters into or causes the entry into any security-based swap agreement1 to which such communication relates2 or 7,b7 communicates the information to another person who makes or causes such a purchase1 sale1 or entry while aware of such information2 and 7#b7 such a purchase1 sale1 or entry while aware of such information is reasonably foreseeable4 7c7 ,standard and knowledge requirement 7#a7 ,standard ,for purposes of this section1 trading while aware of material1 nonpublic information under subsection 7a7 or communicating material nonpublic information under subsection 7b7 is wrongful only if the information has been obtained by1 or its communication or use would constitute1 directly or indirectly-- 7,a7 theft1 bribery1 misrepresentation1 or espionage 7through electronic or other means72 7,b7 a violation of any ,federal law protecting computer data or the intellectual property or privacy of computer users2 7,c7 conversion1 misappropriation1 or other unauthorized and deceptive taking of such information2 or 7,d7 a breach of any fiduciary duty1 a breach of a confidentiality agreement1 a breach of contract1 a breach of any code of conduct or ethics policy1 or a breach of any other personal or other relationship of trust and confidence for a direct or indirect personal benefit 7including pecuniary gain1 reputational benefit1 or a gift of confidential information to a trading relative or friend74 7#b7 ,knowledge requirement ,it shall not be necessary that the person trading while aware of such information 7as proscribed by subsection 7a771 or making the communication 7as proscribed by subsection 7b771 knows the specific means by which the information was obtained or communicated1 or whether any personal benefit was paid or promised by or to any person in the chain of communication1 so long as the person trading while aware of such information or making the communication1 as the case may be1 was aware1 consciously avoided being aware1 or recklessly disregarded that such information was wrongfully obtained1 improperly used1 or wrongfully communicated4 7d7 ,derivative liability ,except as provided in section #bj7;a71 no person shall be liable under this section solely by reason of the fact that such person controls or employs a person who has violated this section1 if such controlling person or employer did not participate in1 or directly or indirectly induce the acts constituting a violation of this section4 7e7 ,affirmative defenses 7#a7 ,in general ,the ,commission may1 by rule or by order1 exempt any person1 security1 or transaction1 or any class of persons1 securities1 or transactions1 from any or all of the provisions of this section1 upon such terms and conditions as it considers necessary or appropriate in furtherance of the purposes of this title4 7#b7 ,directed trading ,the prohibitions of this section shall not apply to any person who acts at the specific direction of1 and solely for the account of another person whose own securities trading1 or communications of material1 nonpublic information1 would be lawful under this section4 7#c7 ,rule #aj;b-#e-a compliant transactions ,the prohibitions of this section shall not apply to any transaction that satisfies the requirements of ,rule #aj;b-#e-a 7#ag ,,cfr #bdj4aj;b#e-a71 or any successor regulation4 4 7b7 ,commission review of ,rule #aj;b-#e-a ,not later than #ahj days after the date of the enactment of this ,act1 the ,securities and ,exchange ,commission shall review ,rule #aj;b-#e-a 7#ag ,,cfr #bdj4aj;b#e-a7 and make any modifications the ,securities and ,exchange ,commission determines necessary or appropriate because of the amendment to the ,securities ,exchange ,act of #aicd made by this ,act4 7c7 ,conforming amendments ,the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq47 is further amended-- 7#a7 in section #ba7;d77#b71 by inserting 1 section #af;,a of this title after section #aj7;b7 of this title12 7#b7 in section #ba;,a-- 7,a7 in subsection 7g77#a71 by inserting and section #af;,a1 after thereunder12 and 7,b7 in subsection 7h77#a71 by inserting and section #af;,a1 after thereunder12 and 7#c7 in section #ba;,c7f71 by inserting or section #af;,a1 after section #aj7;b74 ,passed the ,house of ,representatives ,december #e1 #bjai4;,clerk4