Insider Trading Prohibition Act

The Insider Trading Prohibition Act creates a new federal criminal statute that makes it illegal to buy or sell securities while knowingly in possession of material, nonpublic information that was obtained wrongfully. The bill defines wrongful conduct to include actions such as theft, breach of fiduciary duty, or unauthorized access to data, and explicitly covers situations where an individual consciously avoids knowing the details of how the information was acquired. It also prohibits sharing this type of sensitive information if the sender knows it will be used for trading. While the law allows for certain exemptions, including transactions made under pre-existing Rule 10b5-1 plans, it ensures that these new penalties apply in addition to existing legal remedies.