How to read insider trading legislation: What it’s about and why it matters
By now, you probably have heard that there are some serious problems with insider trading.
It’s not only illegal, but it’s also dangerous.
And while there’s nothing to suggest that Congress will pass any major legislation to fix those problems anytime soon, there’s a growing list of proposals that are looking to address them.
In a recent post on The Verge, Aaron Brinkman, the CEO of the cybersecurity firm CrowdStrike, lays out a few of the more notable proposals.
The most prominent of these is an executive order that would require executive branch agencies to create a “public report” on insider trading and the ways in which it can be stopped.
According to the order, “A report shall be required to include an assessment of whether a program is effective in preventing insider trading, the extent to which it is effective, the costs of enforcement, and the extent of enforcement effectiveness, as well as recommendations for improvements in any program, including any related law.”
While this is a reasonable request to make, it’s far from the only proposal out there.
A few other proposals have been introduced as well.
One proposal, proposed by Sen. Bob Corker (R-TN), would also require the Federal Trade Commission to conduct a “national registry of individuals engaged in insider trading.”
This would essentially put the FTC on a mission to track any individuals who are engaged in trading on insider information.
Other proposals have focused on the federal government’s ability to identify, report, and prosecute insider trading crimes.
In addition, the Trump administration has also called for a number of additional measures, including: a requirement that financial institutions that provide direct financial services to federal contractors must have a “robust system” to prevent financial fraud, and that federal employees who “knowingly and intentionally” violate the law on insider matters must be punished; and the creation of a “corporate registry” that would identify “any insider-trading activities that occur within the scope of their employment.”
As with other proposals, these are just a few ideas that have been floated, but we’re expecting more of this type of legislation to be introduced in the near future.
What’s your thoughts on insider-toting legislation?
Is it necessary?
What would you like to see from the federal Government?
Let us know in the comments below!