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Legislation Regulation White Collar Crime

Lessons from the Insider Trading Prohibition Act After Its Likely Demise In the Senate

For a moment there, it really looked like it was going to happen. After a long and winding road, insider trading reform had reached the floor of the House of Representatives for a vote. The Insider Trading Prohibition Act (ITPA) had support on both sides of the aisle and on Dec. 5, 2019, the House voted to pass the ITPA. Then the bill went to the Senate and vanished. We should take this opportunity to learn what lessons we can from the successes and failures of the ITPA as a bill with an eye toward fashioning the best possible legislation next time — whenever that may be.

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For a moment there, it really looked like it was going to happen. After a long and winding road, insider trading reform had reached the floor of the House of Representatives for a vote. The Insider Trading Prohibition Act (ITPA) had support on both sides of the aisle. Learned professors had testified about the need for action. Past and present commissioners from the Securities and Exchange Commission had weighed in on the merits of the bill. Proponents from all sides of the criminal justice system called for the need for greater clarity in insider trading regulation and enforcement. On Dec. 5, 2019, the House voted to pass the ITPA with 410 yeas against only 13 nays. The hour was at hand.

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