To amend the Securities Exchange Act of 1934 to require the Securities and Exchange Commission to issue rules that prohibit officers and directors of certain companies from trading securities in anticipation of a current report, and for other purposes.
About This Bill
Committee
Latest Action · September 19, 2024
Referred to the House Committee on Financial Services.
The 8-K Trading Gap Act of 2024 would prohibit corporate executives and board directors from buying or selling their company's stock between the time a significant corporate event occurs and when the company publicly reports that event on a Form 8-K filing. The bill targets publicly traded companies and aims to prevent insiders from profiting on material information before it becomes public knowledge. The Securities and Exchange Commission would have one year to develop rules enforcing this ban, though the rules would allow certain automatic transactions and pre-planned trading arrangements to continue under specific conditions. The legislation would exempt investment companies and events that have already been publicly announced through press releases from these restrictions. This bill addresses a timing gap in insider trading regulations that currently allows executives to trade on their knowledge of important company developments during the period between when an event happens and when it must be officially disclosed to investors.
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