H.R. 10133 (IH) – Timely Stock Disclosure Act
Introduced: 2024-11-16
Sponsor: Sylvia Garcia (D-TX)
Status: Referred to the House Committee on Financial Services
Summary
The Timely Stock Disclosure Act would require publicly traded companies to disclose certain material information about their stock within two business days of learning of the information. The bill would also require companies to disclose the identity of any person who purchased or sold the company’s stock within two business days of the transaction.
The bill would apply to all publicly traded companies with a market capitalization of more than $1 billion. The bill would not apply to companies that are already required to disclose material information on a more frequent basis, such as banks and investment funds.
Background
The Timely Stock Disclosure Act was introduced in response to a number of recent cases of insider trading. In one case, a former employee of Tesla was convicted of insider trading after he purchased Tesla stock before the company announced a new product. In another case, a former employee of Facebook was convicted of insider trading after he purchased Facebook stock before the company announced a new acquisition.
The Timely Stock Disclosure Act would make it more difficult for insiders to profit from insider trading by requiring companies to disclose material information about their stock more quickly. The bill would also make it easier for law enforcement to investigate insider trading by requiring companies to disclose the identity of anyone who purchases or sells their stock within two business days of the transaction.
Analysis
The Timely Stock Disclosure Act is a well-intentioned bill that would make it more difficult for insiders to profit from insider trading. However, the bill is likely to face opposition from the business community, which argues that the bill would be too burdensome and would not be effective in preventing insider trading.
The business community argues that the bill would be too burdensome because it would require companies to disclose material information about their stock within two business days of learning of the information. Companies say that this would be difficult to do in many cases, particularly for complex transactions.
The business community also argues that the bill would not be effective in preventing insider trading. They say that insiders will find ways to profit from insider trading even if the bill is passed.
Conclusion
The Timely Stock Disclosure Act is a well-intentioned bill that would make it more difficult for insiders to profit from insider trading. However, the bill is likely to face opposition from the business community, which argues that the bill would be too burdensome and would not be effective in preventing insider trading.
H.R. 10133 (IH) – Timely Stock Disclosure Act
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