[Congressional Record Volume 148, Number 15 (Friday, February 15, 2002)]
[Extensions of Remarks]
[Page E177]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        INTRODUCTION OF THE INSIDER TRADING FULL DISCLOSURE ACT

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                            HON. KEN BENTSEN

                                of texas

                    in the house of representatives

                      Thursday, February 14, 2002

  Mr. BENTSEN. Mr. Speaker, I rise today to introduce legislation, the 
Insider Trading Full Disclosure Act of 2002. This measure would ensure 
that consumers have adequate information about affiliate security 
transactions made by officers, directors, and board members with public 
companies.
  As we have learned through the recent Enron collapse, it is 
critically important that investors have sufficient information about 
trades made by officers and directors of companies. With this 
information, investors will better understand the fiscal health of 
public companies in which they are investing.
  Under current law, these insider trades can be disclosed many days 
after a transaction has occurred. I believe we must act to reduce the 
time frame in which these disclosures are made to the public. In fact, 
some of these transactions can be reported to the Securities and 
Exchange Commission up to 45 days after the calendar year in which the 
transaction occurred. In this Information Age, we should require 
better, real-time disclosure of these transactions.
  My legislation would require these specified individuals to 
electronically file their disclosures one day after the transaction 
into the electronic database maintained by the Securities and Exchange 
Commission (SEC). This database called EDGAR will be searchable and 
would permit investors to quickly ascertain whether officers and 
directors are making trades related to their public company. These 
disclosures include all types of affiliate security transactions, 
including stock sales by an officer and inside trades of securities by 
an officer to their respective company. With better warning, I believe 
that the public will be better served and we will be able to restore 
investor confidence in public companies.
  Yesterday, the Securities and Exchange Commission proposed new steps 
to reform corporate governance rules. As a senior member of the House 
Financial Services Committee, I believe it is necessary for the 
Congress to act to make these requirements mandatory. Without required 
disclosures, I believe many officers and directors will simply wait to 
inform the public about the transactions made on their own behalf.
  In order to prevent conflict-of-interest actions, we need to provide 
full disclosure about affiliate security transactions to protect 
investors and restore investor confidence in our public companies. I 
urge my colleagues to support this effort to require new timely 
disclosures of affiliate transactions related to public companies.

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