,,ib  ,union ,calendar ,no4 #agb  #aafth
 ,,congress  #ast ,session  ,h4 ,r4     
#becd  ,report ,no4 #aaf-bai  ,,in ,,the
 ,,house ,,of ,,representatives  ,may   
#g1 #bjai ,mr4 ,himes introduced the    
following bill2 which was referred to   
the ,committee on ,financial ,services  
,september #bg1 #bjai ,additional       
sponsors3 ,mrs4 ,carolyn ,b4 ,maloney of
 ,new ,york and ,mr4 ,heck  ,september  
#bg1 #bjai ,reported with an amendment1 
committed to the ,committee of the      
,whole ,house on the ,state of the      
,union1 and ordered to be printed       
,strike out all after the enacting      
clause and insert the part printed in   
italic ,for text of introduced bill1 see
 copy of bill as introduced on ,may #g1 
#bjai  ,a ,,bill  ,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 in possession 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 in possession of  
material1 nonpublic information relating
 to such security1 security-based swap1 
or security-based swap agreement1 or    
relating to the market for 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 7a7 7referred  
to in this subsection as the            
#8communicating person'71 wrongfully to 
communicate material1 nonpublic         
information relating to such security1  
security-based swap1 or security-based  
swap agreement1 or relating to the      
market for 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 in       
possession of such information2 and     
7#b7 such a purchase1 sale1 or entry    
while in possession of such information 
is reasonably foreseeable4  7c7         
,standard and knowledge requirement     
7#a7 ,standard ,for purposes of this    
section1 trading while in possession 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 or a breach of any other      
personal or other relationship of trust 
and confidence4  7#b7 ,knowledge        
requirement ,it shall not be necessary  
that the person trading while in        
possession 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 in possession 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 obtained or  
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 profit from1 or    
directly or indirectly induce the acts  
constituting the violation of this      
section4  7e7 ,exempted transactions    
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 
appropriate1 if the ,commission         
determines that such action is not      
inconsistent with the purposes of this  
section4 ,the prohibitions of this      
section shall not apply to any person   
who acts at the specific direction of1  
and solely for the account of1 a person 
whose own securities trading1 or        
communications of material1 nonpublic   
information1 would be lawful under this 

section4  7#b7 ,automatic trading  7,a7 
,in general ,not later than #ahj days   
after the date of the enactment of this 
section1 the ,commission shall determine
 if any automatic trading transactions  
should be exempted from any of the      
provisions of this section and shall    
make such determination available to the
 public1 including on the website of the
 ,commission4  7,b7 ,interim application
 ,during the period between the date of 
the enactment of this section and the   
date on which the ,commission makes a   
determination pursuant to subparagraph  
7,a71 automatic trading transactions    
shall be exempted from the provisions of
 this section4  7,c7 ,automatic trading 
transaction defined ,for the purposes of
 this paragraph1 the term automatic     
trading transaction means any purchase  
or sale of a security1 security-based   
swap1 or security-based swap agreement  
that-- 7i7 occurs automatically2 or     
7ii7 is made pursuant to an advance     
election4  4  7b7 ,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 title2  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  
,september #bg1 #bjai ,reported with an 
amendment1 committed to the ,committee  
of the ,whole ,house on the ,state of   
the ,union1 and ordered to be printed