Promoting Transparent Standards for Corporate Insiders Act

Floor Speech

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Mr. Speaker, I am delighted to rise in support of H.R. 624 and to recognize the bipartisan fashion in which this bill is being brought to the floor and, in particular, thank Ranking Member McHenry for his work on this bipartisan bill.

It is terrific to see the first bill out of the committee and onto the floor be not only a bipartisan bill, but the kind of thing that I think we should be able to find agreement on in this Congress.

We have a robust debate in the committee and in this Congress around the question of how we establish well-balanced regulation on the capital markets and the financial services industry. That is a good debate in which the answer is always moving, but it is terrific to see that we can agree that wherever there is an opportunity either for fraudulent behavior, insider trading, or rent-seeking to occur--that is to say, when there is an advantage for a particular player in the market--that the parties can come together to move legislation like H.R. 624.

Whatever we may think and however we may argue over the proper balance of regulation, if market participants do not have confidence in those markets, we have a huge problem. And nothing erodes confidence so much as the suspicion that there may be players in the market who have an inside advantage who are operating fraudulently.

So, again, I thank Mr. McHenry for his work on this bill. I thank Chairwoman Waters, in particular, for her hard work on this bill.

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Mr. HIMES. Mr. Speaker, I thank very much Madam Chairwoman for yielding, and, again, to the ranking member. It is a delight, as I said before, to come right out with a bipartisan bill that really addresses the fundamental question of confidence in our markets.

H.R. 624--and I will be proud to vote for it and urge my colleagues to do the same--closes a number of technical loopholes that have allowed corporate insiders over time flexibility to actually trade possibly on inside information. That, of course, has the effect of causing regular investors to wonder whether they want to compete with that sort of player in the market.

H.R. 624 is a terrific bipartisan, thoughtful bill right out of the gates in the Financial Services Committee.

I want to just take 30 seconds, though, to reflect on the fact that at this point in time, there is currently no Federal law explicitly prohibiting insider trading. That requires the SEC and the Department of Justice to rely on general antifraud provisions in the law to go after people suspected of insider trading.

Mr. Speaker, in closing, I would just like to urge the committee, the chairwoman and the ranking member, to reflect on the words of U.S. District Judge Jed Rakoff, who wrote: ``But if unlawful insider trading is to be properly deterred, it must be adequately defined. The appropriate body to do so, one would think, is Congress.''

Mr. Speaker, I thank the chairwoman and ranking member for their hard work on this bill. I hope we can take it to the next step of making it very clear that insider trading itself is a crime for the lack of confidence that it generates in our capital markets.

Mr. Speaker, I again thank the chairwoman and the ranking member, and I urge passage of H.R. 624.

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