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The 8-K Trading Gap Act of 2024 would close what lawmakers see as a loophole that allows corporate insiders to trade company stock between the time a significant event occurs and when the company must publicly disclose it through a regulatory filing called Form 8-K. The bill directs the Securities and Exchange Commission to issue rules within one year requiring publicly traded companies to establish policies preventing officers and directors from buying, selling, or transferring company stock during this disclosure gap, which can last from hours to days depending on the event type. The rules would apply to major corporate events such as mergers, bankruptcies, officer departures, and other material developments. The legislation includes some exceptions for automatic transactions, pre-planned trading arrangements, and investment companies that already have ethics codes in place, and it would also apply to foreign companies filing with the SEC. By preventing trades made with knowledge of undisclosed material information, the bill aims to protect regular investors from executives who might profit from knowing about significant company developments before the public does.

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