I 
116TH CONGRESS 
1ST SESSION H. R. 2534 
To amend the Securities Exchange Act of 1934 to prohibit certain securities 
trading and related communications by those who possess material, non-
public information. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 7, 2019 
Mr. HIMES introduced the following bill; which was referred to the Committee 
on Financial Services 
A BILL 
To amend the Securities Exchange Act of 1934 to prohibit 
certain securities trading and related communications by 
those who possess material, nonpublic information. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Insider Trading Prohi-
bition Act’’. 
SEC. 2. PROHIBITION ON INSIDER TRADING. 
(a) IN GENERAL.—The Securities Exchange Act of 
1934 (15 U.S.C. 78a et seq.) is amended by inserting after 
section 16 the following new section: 
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‘‘(B) a violation of any Federal law pro-
tecting computer data or the intellectual prop-
erty or privacy of computer users; 
‘‘(C) conversion, misappropriation, or other 
unauthorized and deceptive taking of such in-
formation; or 
‘‘(D) a breach of any fiduciary duty, a 
breach of a confidentiality agreement, a breach 
of contract, or a breach of any other personal 
or other relationship of trust and confidence. 
‘‘(2) KNOWLEDGE REQUIREMENT.—It shall not 
be necessary that the person trading while in posses-
sion of such information (as proscribed by sub-
section (a)), or making the communication (as pro-
scribed by subsection (b)), knows the specific means 
by which the information was obtained or commu-
nicated, or whether any personal benefit was paid or 
promised by or to any person in the chain of com-
munication, so long as the person trading while in 
possession of such information or making the com-
munication, as the case may be, was aware, con-
sciously avoided being aware, or recklessly dis-
regarded that such information was wrongfully ob-
tained or communicated. 
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‘‘(d) DERIVATIVE LIABILITY.—Except as provided in 
section 20(a), 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 section, if such 
controlling person or employer did not participate in, prof-
it from, or directly or indirectly induce the acts consti-
tuting the violation of this section. 
‘‘(e) EXEMPTED TRANSACTIONS.— 
‘‘(1) IN GENERAL.—The Commission may, by 
rule or by order, exempt any person, security, or 
transaction, or any class of persons, securities, or 
transactions, from any or all of the provisions of this 
section, upon such terms and conditions as it con-
siders necessary or appropriate, if the Commission 
determines that such action is not inconsistent with 
the purposes of this section. The prohibitions of this 
section shall not apply to any person who acts at the 
specific direction of, and solely for the account of, a 
person whose own securities trading, or communica-
tions of material, nonpublic information, would be 
lawful under this section. 
‘‘(2) AUTOMATIC TRADING.— 
‘‘(A) IN
GENERAL.—Not later than 180 
days after the date of the enactment of this sec-
tion, the Commission shall determine if any 
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automatic trading transactions should be ex-
empted from any of the provisions of this sec-
tion and shall make such determination avail-
able to the public, including on the website of 
the Commission. 
‘‘(B) INTERIM APPLICATION.—During the 
period between the date of the enactment of 
this section and the date on which the Commis-
sion makes a determination pursuant to sub-
paragraph (A), automatic trading transactions 
shall be exempted from the provisions of this 
section. 
‘‘(C) AUTOMATIC
TRADING
TRANSACTION 
DEFINED.—For the purposes of this paragraph, 
the term ‘automatic trading transaction’ means 
any purchase or sale of a security, security- 
based swap, or security-based swap agreement 
that— 
‘‘(i) occurs automatically; or 
‘‘(ii) is made pursuant to an advance 
election.’’. 
(b) CONFORMING
AMENDMENTS.—The Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.) is further 
amended— 
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(1) in section 21(d)(2), by inserting ‘‘, section 
16A of this title’’ after ‘‘section 10(b) of this title,’’; 
(2) in section 21A— 
(A) in subsection (g)(1), by inserting ‘‘and 
section 16A,’’ after ‘‘thereunder,’’; and 
(B) in subsection (h)(1), by inserting ‘‘and 
section 16A,’’ after ‘‘thereunder,’’; and 
(3) in section 21C(f), by inserting ‘‘or section 
16A,’’ after ‘‘section 10(b)’’. 
(c) SENSE OF CONGRESS.—It is the sense of the Con-
gress that the amendments made by this Act are intended 
to supercede section 10(b) or 14e of the Securities Ex-
change Act of 1934 with regard to the wrongful use or 
wrongful communication of material, nonpublic informa-
tion in connection with the purchase or sale of securities, 
security-based swaps, and security-based swap agree-
ments. 
Æ 
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