This bill — the Insider Trading Prohibition Act — would define and prohibit illegal insider trading at the federal level, making it a federal crime. It would also prohibit people who wrongfully obtain material nonpublic information (MNPI) from communicating that information to others for the purposes of securities trading, regardless of whether or not a payment or a promised personal benefit was involved. 
For the purposes of this bill, “wrongful” would be defined as information obtained: 
Through theft, bribery, misrepresentation or espionage;

In violation of any federal law protecting computer data, intellectual property, or the privacy of computer users;

The conversion, misappropriation or other unauthorized and deceptive taking of computer data or intellectual property; or 

Through a breach of any fiduciary duty or any other personal or other relationship of trust and confidence.
This bill would also make the Securities and Exchange Commission (SEC) responsible for determining whether the new insider trading prohibitions also apply to automated security-trading transactions. The SEC would also have the authority to exempt any person or transaction under this bill at its discretion. 

Finally, this bill would remove a requirement under current law, established in U.S. v. Newman, that requires the person who receives a “tip” and trades on that information to have knowledge that the “tipper” received a personal benefit for providing the MNPI. Under this bill, all that’s needed to prove insider trading is the establishment of the fact that the tippee was aware of, or recklessly disregarded, the fact that the information was wrongfully obtained or communicated, and still traded on it.
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