[Congressional Record Volume 165, Number 194 (Thursday, December 5, 2019)]
[House]
[Pages H9271-H9279]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INSIDER TRADING PROHIBITION ACT
General Leave
Ms. WATERS. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
on H.R. 2534 and to insert extraneous material thereon.
The SPEAKER pro tempore (Mr. Raskin). Is there objection to the
request of the gentlewoman from California?
There was no objection.
The SPEAKER pro tempore. Pursuant to House Resolution 739 and rule
XVIII, the Chair declares the House in the Committee of the Whole House
on the state of the Union for the consideration of the bill, H.R. 2534.
The Chair appoints the gentlewoman from Alabama (Ms. Sewell) to
preside over the Committee of the Whole.
{time} 1321
In the Committee of the Whole
Accordingly, the House resolved itself into the Committee of the
Whole House on the state of the Union for the consideration of the bill
(H.R. 2534) to amend the Securities Exchange Act of 1934 to prohibit
certain securities trading and related communications by those who
possess material, nonpublic information, with Ms. Sewell of Alabama in
the chair.
The Clerk read the title of the bill.
The CHAIR. Pursuant to the rule, the bill is considered read the
first time.
General debate shall be confined to the bill and shall not exceed 1
hour equally divided and controlled by the chair and ranking minority
member of the Committee on Financial Services.
The gentlewoman from California (Ms. Waters) and the gentleman from
Michigan (Mr. Huizenga) each will control 30 minutes.
The Chair recognizes the gentlewoman from California.
Ms. WATERS. Madam Chairwoman, I yield myself such time as I may
consume.
Madam Chairwoman, I rise in strong support of H.R. 2534, the Insider
Trading Prohibition Act, introduced by the gentleman from Connecticut,
Representative Jim Himes.
This long overdue bill creates a clear definition of illegal insider
trading under the securities laws so that there is a codified,
consistent standard for courts and market participants to better
protect the hard-earned savings of millions of Americans and bring
certainty to the U.S. securities market.
For nearly 80 years, the Securities and Exchange Commission--that is,
the SEC--has sought to hold corporate insiders accountable for insider
trading through general statutory antifraud provisions and rules it has
promulgated under those provisions. This has resulted in a web of court
decisions that generally prohibit insiders with a duty of trust and
confidence to a corporation from secretly trading on material,
nonpublic corporate information for their own personal gain.
These insiders are also generally prohibited from tipping outsiders,
known as tippees, who then trade on the information themselves, even
though they know it was wrongfully obtained.
But, because there isn't a statutory definition of ``insider
trading,'' there is uncertainty around who is subject to insider
trading prohibitions; and, with various court decisions, liability for
this type of violation has shifted.
For example, in 2014, an appeals court added a brand-new requirement
that the tippee must not just know that information was wrongfully
disclosed but must also know about the specific personal benefit that
the insider received.
This decision has severely hampered the SEC's ability to prosecute
insider trading cases and, according to Preet Bharara, the former U.S.
attorney for the Southern District of New York ``provides a virtual
roadmap for savvy hedge fund managers to insulate themselves from
tippee liability by knowingly placing themselves at the end of a chain
of insider information and avoiding learning details about the sources
of obvious confidential and improperly disclosed information.''
[[Page H9272]]
So I am pleased that this bill codifies existing case law and
overturns this new controversial requirement, creating a clear,
consistent standard for the SEC, the courts, and market participants to
follow, and does so in a way that, as Columbia Law School professor
John Coffee testified before one of our subcommittees, ``expands
liability in ways that should not be controversial.''
I would like to commend Representative Himes for his efforts since
the bill was marked up in May in committee to ensure that it fairly
reflects existing law. In addition to extensive outreach to current and
former regulators and prosecutors, investor advocates, and
institutional investors, Mr. Himes also repeatedly engaged with our
colleagues on the opposite side of the aisle.
As a result, Ranking Member McHenry will offer an amendment which
will remove unnecessary ambiguities, clarify the intent of the bill to
reflect existing insider trading case law, and ensure that the bill
preserves the SEC's ability to bring bad actors to justice under other
related insider trading laws.
I plan to support this amendment as a reasonable bipartisan
compromise, so I urge all Members to support this commonsense bill that
makes the definition of illegal trading very clear for all so that the
SEC can effectively crack down on corporate insiders who illegally
trade on inside information.
Madam Chair, I reserve the balance of my time.
Mr. HUIZENGA. Madam Chair, I yield myself such time as I may consume.
Madam Chair, preventing fraud and abuse within our financial system
and cracking down on bad actors for illegal insider trading is a
nonpartisan priority. This kind of fraud and illegal activity hurts
everyday investors, and it also makes our markets less efficient,
accurate, and reliable.
Current law prohibits trading on material insider information in
breach of a fiduciary duty under the antifraud provisions of the
Federal securities law.
The Securities and Exchange Commission and the Department of Justice
are the Federal agencies tasked with enforcing insider trading. Both
agencies regularly use their authority by bringing insider trading
cases against bad actors who violate our insider trading laws.
The SEC has not asked for this bill, however, unlike other bills that
Republicans have voted for out of this House in the past month.
Moreover, Democrats have not fully identified a problem within the
current body of the law that inhibits the prosecution of bad actors who
illegally trade on material, nonpublic information.
As it is written before us on the floor at this moment, this bill
could potentially create more confusion and uncertainty within the law
of insider trading. It could even expand liability for good faith
traders, which would hurt the efficiencies of our markets, chill vital
information gathering, and weaken investor confidence.
Republican and Democrat SEC chairs alike, with vastly different
approaches to enforcement matters, have expressed concern over Congress
codifying a prohibition on insider trading into one single statute.
Specifically, they voiced concerns that Congress would write a law that
could be both overly broad and too narrow at the same time.
I share their concerns with the bill as drafted before us today, and
I am pleased to hear that the chair has indicated that the majority
will be accepting the ranking member's amendment shortly.
I am concerned that the current version of the bill, however, does
not include an explicit personal benefit test, as set forth by the
Supreme Court precedents. I am troubled that an unclear phrasing such
as ``relating to the market'' is overbroad and will allow judges and
prosecutors to expand the law.
I am also concerned that the bill, as drafted, lacks an exclusivity
provision that would make this bill the exclusive law of the land.
Finally, the rule of construction section before us is troubling,
because the Financial Services Committee has not even had a chance to
debate this specific language. I fear that this language could add more
confusion and uncertainty around insider trading laws, with rogue
judges and prosecutors using the language to expand the bounds of
insider trading law.
I do believe that the ranking member's amendment goes a distance in
clarifying that, but, as I will talk about, I will be having an
amendment later on as well that I believe further clarifies that.
{time} 1330
Drafting a statute that appropriately and accurately captures the
subtleties of insider trading case law and regulations that have been
shaped and finessed over decades into one single statute isn't easy, to
say the least.
Achieving bipartisan support also isn't easy, especially when it
involves nuanced and technical substance such as the body of insider
trading law.
My colleague, Ranking Member McHenry, will be offering his amendment
momentarily that represents a bipartisan agreement with the author to
improve the bill by including some Republican priorities and improving
the bill to better track current insider trading law.
As I had mentioned, I will be offering an amendment as well in an
attempt to further clarify and improve this proposal.
So, while we are unsure exactly what the final product is going to
look like here, I do want to commend both Mr. Himes and Ranking Member
McHenry for working together to attempt to reach a bipartisan agreement
to improve this bill with the amendment and to make it clear that it is
Congress' intent to codify existing law without broadening it into new
areas. I hope that the author of the legislation will accept my
amendment as well.
Madam Chair, I reserve the balance of my time.
Ms. WATERS. Madam Chair, I yield such time as he may consume to the
gentleman from Connecticut (Mr. Himes), the chair of the Strategic
Technologies and Advanced Research Subcommittee of the Permanent Select
Committee on Intelligence, and a valued member of the Financial
Services Committee.
Mr. HIMES. Madam Chair, I thank the gentlewoman for yielding.
I rise, delighted today by our consideration of H.R. 2534, the
Insider Trading Prohibition Act, because, after years of work, we are
going to produce a bipartisan product which actually does address a
significant challenge in insider trading law, and that is, in general,
that, to date, there has existed, remarkably, no specific statutory
prohibition on insider trading.
I am a believer, as I know everyone else in this Chamber is, that, if
we are going to create criminal or civil liability, the legislators of
the Congress of the United States should make specific how and when and
under what circumstances we do so. And that is what we are doing today,
I am delighted to report, in bipartisan fashion.
But let me back up for a second, for those who don't sit on the
committee or watch this particular space all that closely, just to
explain why this is important.
Insider trading is an activity in which somebody who has information
that they have been entrusted with, or for which they have paid or come
by in some dishonest fashion, uses it to secure a market advantage.
They have information that others don't. They trade on that
information. That allows them to get a material gain.
There is a problem with that, quite apart from the notion that it is
only insiders or those people who are not acting based on their talent
or their intelligence or their hard work, but acting based on who they
know or, worse yet, who they might have paid, that they are the ones
who benefit from our capital markets. I think that notion sort of
strikes at the fundamental sense of fairness that we all carry around.
But, inasmuch as this behavior exists, it is profoundly damaging to
the capital markets that are such a hallmark of the United States, and
it is damaging because those capital markets rely on the confidence
that millions of American families have out there that their hard-
earned savings can be put into the market, invested, and redeployed in
a way that is fair to them, that will create a return, and that they
are doing so on a level playing field, not competing with people who
may have an inside advantage.
[[Page H9273]]
Now, the good news here is that, in the generations preceding us, we
have, in fact, prosecuted insider trading, but we have done so under
antifraud provisions of the Securities Acts that were passed in the
early 1930s; and, as a result, there is not a particularly good fit
between the concept of fraud and the concept of insider trading.
And to my friend Mr. Huizenga's point, as he knows, this has led to a
vast body of court-determined law, starting with the Dirks decision in
1984, moving through Materia, Carpenter, O'Hagan, all court decisions
which crafted the concept of liability around insider trading,
culminating in the 2014 Newman decision by the Second Circuit, leading
then to the Salman decision at the Supreme Court in 2016.
All of these cases that I have mentioned have created uncertainty
about the nature of liability and have resulted in overturned
convictions of people who behaved in ways that would violate our
intuitive sense of right and wrong.
So, because of this uncertainty, because of the overturning of
convictions, now is the moment for us to finally do what we are here to
do, which is to make it very clear what the law of the land is.
So the moment has come to pass this legislation, and I am delighted
to say it comes after years of working with experts like the
aforementioned Professor John Coffee, past and present Commissioners of
the Securities and Exchange Commission, and consultation with
prosecutors as well as with defense attorneys.
This is a fairly fiddly and technical area of the law, and so it was
my intention, over the years, to make sure that we crafted good law
which created liability for bad behavior but which did not, in fact,
create liability for behavior like doing a little extra work to secure
an advantage in investments.
It was also very, very important to me that this be done on a
bipartisan basis. There is really nothing partisan about this bill.
Neither party believes in insider trading or wants to support insider
trading. This is not a question of balancing regulation or allocating
public resources; this is a question of clarity of law.
So I want to close, apart from just saying that that has been the
track record of the establishment and writing of this legislation, by
thanking Ranking Member McHenry and Ranking Member Huizenga.
There will be an amendment offered by Ranking Member McHenry which
the Democrats support. It does improve the bill. It is not really a
compromise in the sense that it actually makes for a better bill.
But I am pleased to say that, after a lot of hard work, this is, in
fact, the product of some very robust engagement between the Democratic
and Republican Representatives in this Chamber. That is not easy to
achieve under these circumstances.
So I want to start, first and foremost, by thanking Chairwoman Waters
and Chairwoman Maloney for their sponsorship and then, again, Mr.
McHenry and Mr. Huizenga, who committed to really understanding what is
a technical corner of the law and offered, in good faith, amendments,
including some ideas that we will shortly be taking up.
And then, finally, as every Member in this Chamber knows, hard work
happens and gets done and leads to success only because of the
commitment and very, very hard work of the staff on both sides of the
aisle. So, before yielding back my time to the chairwoman, I do want to
specifically thank Katelynn Bradley, Ben Harney, David Fernandez, and
David Karp from the Financial Services staff; Mark Snyder, my
legislative director, and Rachel Kelly, his predecessor, from my staff.
And then, on the Republican side, big thanks to Kimberly Betz, McArn
Bennett, and Jamie McGinnis.
Madam Chair, I urge passage of this law. This will be a good thing
for the confidence in our capital markets. It will be a good thing in
reassuring the American public that we can get things done on a
bipartisan basis. On that basis, I urge passage of H.R. 2534, the
Insider Trading Prohibition Act.
Mr. HUIZENGA. Madam Chair, I yield such time as he may consume to the
gentleman from Wisconsin (Mr. Steil), the newest member of the Investor
Protection, Entrepreneurship, and Capital Markets Subcommittee.
Mr. STEIL. Madam Chair, I thank my colleague from Michigan. Our
districts touch in the middle of Lake Michigan, so I have never been to
that part of my district, and maybe the gentleman has not either, but I
appreciate him yielding.
I rise today to urge support of the Insider Trading Prohibition Act.
I want to thank Chairwoman Waters, Ranking Member McHenry, as well as
Mr. Huizenga and Mr. Himes for their work on this important piece of
legislation.
As we have seen far too often in this Congress, partisanship and
poison pills can get in the way of progress and good ideas. I think all
of us, at our core, agree on that. Although this took a little bit of
time, I am pleased that we came here today reaching agreements from
earlier in the week.
I spent my time working for a period of time at a publicly traded
company. I saw firsthand the importance of having markets that operate
efficiently but, also, fairly.
Millions of Americans have retirement accounts, 401(k)s, and pensions
as it relates to their retirement, and it is critical that those
individuals can rely and trust the markets that they are relying on for
their end of life.
Millions of Americans are invested in these markets and these
investments, the integrity of which is critical. They need to know that
we are fighting on their behalf to ensure the game is not rigged to
help and favor a privileged few.
This bill includes, in particular, important clarifications that will
improve our ability to police insider trading. It also incorporates
changes supported by the ranking member in an amendment that I offered
that I think provides important clarifications to allow the government
to go after the bad guys.
This will ensure the bill is targeted at bad behavior and does not
inadvertently prevent people from engaging in legitimate trades. It
strikes the balance that I think is crucial if we want to have vibrant
and trustworthy public markets.
I, again, want to urge my colleagues to support this nonpartisan
legislation.
Ms. WATERS. Madam Chair, I reserve the balance of my time.
Mr. HUIZENGA. Madam Chair, I yield such time as he may consume to the
gentleman from North Carolina (Mr. McHenry), the distinguished ranking
member.
Mr. McHENRY. Madam Chair, I thank the ranking member of the Investor
Protection, Entrepreneurship, and Capital Markets Subcommittee, Mr.
Huizenga, for his good work in committee and working on important
legislation for economic growth and for his constituents in Michigan.
Madam Chair, preventing and punishing bad actors for illegal insider
trading is one of the top priorities of Republicans on the House
Financial Services Committee because this illegal activity hurts
everyday Main Street investors as well as the integrity and the
efficiency of our markets.
Trading on material insider information in breach of a fiduciary duty
is currently prohibited by court-made law under the antifraud
provisions of the Federal securities laws that we have. The Securities
and Exchange Commission and the Department of Justice have the power to
bring insider trading cases, and both agencies regularly exercise this
power and have done so for decades.
Our body of insider trading laws has been developed through those
decades of judicial precedent to protect investors and the markets by
punishing bad actors who illegally trade on insider information.
Codifying nuanced case law and regulations that have been developed
over decades into a single statute is really difficult. It is a very
difficult undertaking, and it is, really, a very delicate piece of
legislating that must occur.
Both Republicans and Democrats who have served on the Securities and
Exchange Commission have expressed concerns about Congress drafting a
statute that accurately captures this extensive and expansive body
of law without expanding it into new areas, inadvertently, perhaps, or
perfectly by design in some areas.
Moreover, bipartisanship is never easy. It is a give-and-take. It is
a difficult process. I appreciate the gentleman from Connecticut (Mr.
Himes)
[[Page H9274]]
for his willingness to work with us in a bipartisan manner.
The bill on the floor today is not perfect, and, as the gentleman
from Connecticut knows, I have several concerns with this bill.
I have concerns about the lack of an explicit personal benefit test
consistent with Supreme Court precedent.
I am concerned that ambiguous language currently in the bill, such as
``relating to the market,'' is ripe for activist judges and overzealous
prosecutors and private plaintiffs to exploit, leading to greater
uncertainty for anyone involved in investing. That is not what we want;
that is not what we seek; and that should not be this undertaking. And
I also don't believe that that is the intention of my colleague from
Connecticut in the drafting of this bill.
I am also troubled that the Rules Committee print before us does not
include an exclusivity provision establishing that this bill is the
insider trading law rather than just an additional action around
insider trading.
Finally, the Rules Committee print includes a rule of construction
section that has yet to be vetted through the Financial Services
Committee; and without a full understanding of the implications of this
language, the bill could further open the door for activist judges,
overzealous prosecutors, and trial lawyers, creating even more
confusion around insider trading law.
{time} 1345
That is not good for investors. That is not good for our markets. It
is not good for anyone outside of a narrow few that personally benefit
through fees around lawsuits.
My amendment, which I will offer in a minute, addresses some of these
concerns, and I appreciate my colleague from Connecticut, and I
appreciate the chair of the Financial Services Committee, Ms. Waters,
for their engagement so that we can actually come to a bipartisan
agreement on this important act.
Now, Republicans continue to support sensible bipartisan insider
trading bills, such as the one that Chairwoman Waters and I brought
forth, or she brought forth, as the first action of our committee on
this House floor in this Congress, which was promoting Transparent
Standards for Corporate Insiders Act, which we passed out of this
Chamber. And starting off with the fact that we are going to be tough
on bad actors from the Financial Services Committee and doing it in a
bipartisan way shows our seriousness. And this bill before us is an
addition to that seriousness that we take against bad actors in our
area of jurisdiction.
Finally, I would say this: We currently have out of decades of
lawsuits, decades of regulatory enforcement, we have the greatest
clarity on insider trading that we have ever had in this Nation, and
that is due to two Supreme Court cases, in particular, giving us
serious rules of the road. And I think that clarity is good. And what
we want out of this legislation is to put in statute what is confirmed
and established currently in the marketplace and currently in the
courts of law.
This is not to create more confusion or more lawsuits, but rather,
codify what is a well-regulated, bright-line space that we currently
have. And we want to take that consistency that we currently have and
establish it in statute. And that is the reason why Republicans have
engaged deeply with Democrats over the last 5 months to come to some
reasonable conclusion on this important matter of banning insider
trading.
So Congress will have its say. I believe we will have a bipartisan
vote for final passage, if my amendment is adopted, and I would hope
that that would take place. And we have had good conversations along
those lines, and I think we have workable language that could be
acceptable to all in this body.
I want to thank everyone who has participated, but most particularly
Mr. Himes from Connecticut. While we don't agree on every issue--heck,
I don't think you would get reelected in Connecticut if you agreed with
me on every issue, nor I in North Carolina in my district--
bipartisanship is a hard thing, but if we are going to do big,
important things, we have to try for that. And when you are in the
majority, it is implicit you have more votes than those in the
minority.
So Democrats could pass this bill on their own. They could. And if
they wanted to just use this as a political issue, they could just jam
the language they have; they could, right? But it was your willingness
to reach out, so that we could actually have a big bipartisan vote,
rather than a narrow victory. That is also something that is a marker,
that most in this country don't hear about, that we actually do talk.
We may disagree on big things, we may, and from time to time Chairwoman
Waters and I have had our public disagreements, but at the same time we
have been able to come to terms on important things in our jurisdiction
and get things done.
So while that is not the everyday case for this Congress, when it
happens, I think we should actually acknowledge it. Not that anybody is
going to pat us on the back for it, but we should acknowledge it.
I thank my colleagues on the Democrat side of the aisle for their
work, and I thank my colleagues on the Republican side of the aisle for
their work, as well.
Mr. HUIZENGA. Madam Chair, I yield myself the balance of my time.
Madam Chair, I would like to take this time to, again, congratulate
the work that has been done. I do believe that there is additional work
that is before us.
I will be having an amendment that I will be offering a little later
on, and at this point, I think, as it is coming together, there still
is not going to be total agreement or total unanimity. You will see
with the ranking member's amendment a number of Republicans who will
join this bill. I believe that with the adoption of my amendment you
would see even further Republican support of the underlying bill.
There will be some dissent. There is dissent within the industry.
There is dissent within those prosecutors and the regulators. As I had
noted, both Republican and Democrat chairs of the SEC and commissioners
of the SEC have said that having Congress act on this particular issue
will set off a new chain of events, a new set of legal challenges that
will take years to settle in the courts, as well, and they are
comfortable with the options that they have the way current law has
settled.
Having said that, again, as the ranking member had said, in an
attempt to codify a number of those Supreme Court rulings is
commendable. I tend to be one who believes that Congress has a
responsibility to review and look at and examine whether they should
codify precedent.
I find it interesting that on both sides this happens and with the
regulators, and that everyone seems to pick and choose a little bit as
to what subject area they would like to codify and what subject area
they would continue to like to have flexibility on, based on those
lawsuits.
At this time the ranking member and his work with the gentleman from
Connecticut has made significant progress, and I look forward to
adopting the gentleman from North Carolina's amendment and the
potential adoption of my amendment, as well, as we move forward.
Madam Chair, I yield back the balance of my time.
Ms. WATERS. Madam Chair, I yield myself the remainder of my time.
Madam Chairwoman, H.R. 2534, the Insider Trading Prohibition Act, is
a long overdue piece of legislation that simply spells out the
definition of illegal insider trading under the securities laws. It
creates clarity for participants in financial markets and empowers the
SEC to punish bad actors.
As we have discussed, this bill is supported by groups, including the
Council of Institutional Investors, the California State Teachers'
Retirement System, the North American Securities Administrators
Association, Healthy Markets, and Public Citizen.
Madam Chair, I thank the ranking member, Mr. McHenry, for his very
kind comments. I thank him for his cooperation. I thank him for
recognizing that it is possible to have bipartisan legislation. And I
thank him for recognizing that Mr. Himes has worked very hard to ensure
that he would have this as bipartisan legislation, rather than simply
having the Democrats try to run roughshod over the opposite side of the
aisle to get this done.
I urge all Members to vote ``yes'' on this important bill. Madam
Chair, I yield back the balance of my time.
[[Page H9275]]
The CHAIR. All time for general debate has expired.
Pursuant to the rule, the bill shall be considered for amendment
under the 5-minute rule.
In lieu of the amendment in the nature of a substitute recommended by
the Committee on Financial Services, printed in the bill, an amendment
in the nature of a substitute consisting of the text of Rules Committee
Print 116-39, shall be considered as adopted.
The bill, as amended, shall be considered as the original bill for
the purpose of further amendment under the 5-minute rule and shall be
considered as read.
The text of the bill, as amended, is as follows:
H.R. 2534
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1 SHORT TITLE.
This Act may be cited as the ``Insider Trading Prohibition
Act''.
SEC. 2. PROHIBITION ON INSIDER TRADING.
(a) In General.--The Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.) is amended by inserting after section 16
the following new section:
``SEC. 16A. PROHIBITION ON INSIDER TRADING.
``(a) Prohibition Against Trading Securities While Aware of
Material, Nonpublic Information.--It shall be unlawful for
any person, directly or indirectly, to purchase, sell, or
enter into, or cause the purchase or sale of or entry into,
any security, security-based swap, or security-based swap
agreement, while aware of material, nonpublic information
relating to such security, security-based swap, or security-
based swap agreement, or relating to the market for such
security, security-based swap, or security-based swap
agreement, if such person knows, or recklessly disregards,
that such information has been obtained wrongfully, or that
such purchase or sale would constitute a wrongful use of such
information.
``(b) Prohibition Against the Wrongful Communication of
Certain Material, Nonpublic Information.--It shall be
unlawful for any person whose own purchase or sale of a
security, security-based swap, or entry into a security-based
swap agreement would violate subsection (a), wrongfully to
communicate material, nonpublic information relating to such
security, security-based swap, or security-based swap
agreement, or relating to the market for such security,
security-based swap, or security-based swap agreement, to any
other person if--
``(1) the other person--
``(A) purchases, sells, or causes the purchase or sale of,
any security or security-based swap or enters into or causes
the entry into any security-based swap agreement, to which
such communication relates; or
``(B) communicates the information to another person who
makes or causes such a purchase, sale, or entry while aware
of such information; and
``(2) such a purchase, sale, or entry while aware of such
information is reasonably foreseeable.
``(c) Standard and Knowledge Requirement.--
``(1) Standard.--For purposes of this section, trading
while aware of material, nonpublic information under
subsection (a) or communicating material nonpublic
information under subsection (b) is wrongful only if the
information has been obtained by, or its communication or use
would constitute, directly or indirectly--
``(A) theft, bribery, misrepresentation, or espionage
(through electronic or other means);
``(B) a violation of any Federal law protecting computer
data or the intellectual property or privacy of computer
users;
``(C) conversion, misappropriation, or other unauthorized
and deceptive taking of such information; or
``(D) a breach of any fiduciary duty, a breach of a
confidentiality agreement, a breach of contract, a breach of
any code of conduct or ethics policy, or a breach of any
other personal or other relationship of trust and confidence.
``(2) Knowledge requirement.--It shall not be necessary
that the person trading while aware of such information (as
proscribed by subsection (a)), or making the communication
(as proscribed by subsection (b)), knows the specific means
by which the information was obtained or communicated, or
whether any personal benefit was paid or promised by or to
any person in the chain of communication, so long as the
person trading while aware of such information or making the
communication, as the case may be, was aware, consciously
avoided being aware, or recklessly disregarded that such
information was wrongfully obtained, improperly used, or
wrongfully communicated.
``(d) Derivative Liability.--Except as provided in section
20(a), no person shall be liable under this section solely by
reason of the fact that such person controls or employs a
person who has violated this section, if such controlling
person or employer did not participate in, or directly or
indirectly induce the acts constituting a violation of this
section.
``(e) Affirmative Defenses.--
``(1) In general.--The Commission may, by rule or by order,
exempt any person, security, or transaction, or any class of
persons, securities, or transactions, from any or all of the
provisions of this section, upon such terms and conditions as
it considers necessary or appropriate in furtherance of the
purposes of this title.
``(2) Directed trading.--The prohibitions of this section
shall not apply to any person who acts at the specific
direction of, and solely for the account of another person
whose own securities trading, or communications of material,
nonpublic information, would be lawful under this section.
``(3) Rule 10b-5-1 compliant transactions.--The
prohibitions of this section shall not apply to any
transaction that satisfies the requirements of Rule 10b-5-1
(17 C.F.R. 240.10b5-1), or any successor regulation.
``(f) Rule of Construction.--Section 10(b) and 14(e) and
any judicial precedents from judicial decisions under such
sections shall apply to the purchase or sale of or entry
into, any security, security-based swap, or security-based
swap agreement to the extent such decisions do not conflict
with the provisions of this section.''.
(b) Commission Review of Rule 10b-5-1.--Not later than 180
days after the date of the enactment of this Act, the
Securities and Exchange Commission shall review Rule 10b-5-1
(17 C.F.R. 240.10b5-1) and make any modifications the
Securities and Exchange Commission determines necessary or
appropriate because of the amendment to the Securities
Exchange Act of 1934 made by this Act.
(c) Conforming Amendments.--The Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.) is further amended--
(1) in section 21(d)(2), by inserting ``, section 16A of
this title'' after ``section 10(b) of this title,'';
(2) in section 21A--
(A) in subsection (g)(1), by inserting ``and section 16A,''
after ``thereunder,''; and
(B) in subsection (h)(1), by inserting ``and section 16A,''
after ``thereunder,''; and
(3) in section 21C(f), by inserting ``or section 16A,''
after ``section 10(b)''.
The CHAIR. No further amendment to the bill, as amended, shall be in
order except those printed in House Report 116-320. Each such further
amendment may be offered only in the order printed in the report, by a
Member designated in the report, shall be considered read, shall be
debatable for the time specified in the report equally divided and
controlled by the proponent and an opponent, shall not be subject to
amendment, and shall not be subject to a demand for division of the
question.
Amendment No. 1 Offered by Mr. McHenry
The CHAIR. It is now in order to consider amendment No. 1 printed in
House Report 116-320.
Mr. McHENRY. Madam Chair, I have an amendment at the desk.
The CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 1, beginning on line 17, strike ``relating to the
market for'' and insert ``any nonpublic information, from
whatever source, that has, or would reasonably be expected to
have, a material effect on the market price of any''.
Page 2, beginning on line 11, strike ``relating to the
market for'' and insert ``any nonpublic information, from
whatever source, that has, or would reasonably be expected to
have, a material effect on the market price of any''.
Page 3, line 21, insert before the period the following:
``for a direct or indirect personal benefit (including
pecuniary gain, reputational benefit, or a gift of
confidential information to a trading relative or friend)''.
Page 5, strike lines 12 through 17 and insert a closing
quotation mark and a period.
The CHAIR. Pursuant to House Resolution 739, the gentleman from North
Carolina (Mr. McHenry) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from North Carolina.
Mr. McHENRY. Madam Chair, as I just mentioned a few minutes ago, I
have concerns with H.R. 2534, the Insider Trading Prohibition Act in
its current form. And, Madam Chair, my amendment addresses several of
these concerns and improves this bill to better demonstrate
congressional intent of codifying current insider trading law and not
expanding it.
I thank the bill's sponsor, the gentleman from Connecticut (Mr.
Himes) and his staff for their diligence and patience in working with
us over the last few months and over the recent Thanksgiving holiday. I
also want to thank both of our staffs, as well as the Waters' staff.
And I want to thank Mr. Himes for agreeing to support this amendment in
order to make this underlying bill a bipartisan approach to codify
insider trading law and punish bad actors.
My amendment reflects Republican priorities discussed at our May
markup, such as the inclusion of an explicit personal benefit test
consistent with Supreme Court precedent, the removal of the novel rule
of construction section from the Rules print of this bill, and a
clarification of ambiguous words to ensure judges and prosecutors know
that this bill is not intended to expand or create new insider trading
liability.
[[Page H9276]]
The bill as drafted does not explicitly include the so-called
personal benefit test, a significant element of insider trading law
that prosecutors must currently satisfy in certain insider trading
cases. In the 2016 Salman case, the Supreme Court noted that in order
for a violation to have occurred, the insider or ``tipper'' providing
the material, nonpublic information must have received a direct or
indirect personal benefit, including but not limited to, pecuniary
gain, reputational benefit, or a gift of confidential information to a
trading relative or friend.
Including an explicit personal benefit test, as set forth by the
Supreme Court, ensures that this important test cannot be read more
broadly by judges than the Supreme Court has allowed, and also, this
prevents activist judges and overzealous prosecutors from reading the
test out of law entirely.
My amendment also clarifies the ambiguities within the ``relating to
the market'' phrasing in the underlying bill. This phrase ``relating to
the market'' is not a legal term of art defined within the existing
body of insider trading law, nor is it defined in this bill. It is
entirely plausible for an activist judge or a rogue prosecutor to
interpret this phrase far more broadly than the drafters of the bill
intended.
This amendment provides a limiting principle by applying only to
nonpublic information that has or is reasonably expected to have a
material effect on the market price of a security. This ensures that
the statute will still capture cases where the receipt of material,
nonpublic information was not from the company itself, but from another
source. This is referenced in the Supreme Court's 1987 Carpenter
decision.
Finally, my amendment strikes the rule of construction section in the
underlying bill that was not reviewed or debated in the House Financial
Services Committee. I believe this provision is, at best, unnecessary
and at worst, could have been read as giving a congressional stamp of
approval for a poorly reasoned judicial set of decisions.
{time} 1400
As such, my amendment would ensure that Congress' intent is to simply
codify existing law, not expand liability or create additional defenses
for those accused of insider trading. This is about codifying what is
already existent, period, end of statement.
That being said, my amendment does not achieve all the Republican
goals that we have previously outlined in our committee markup and
committee hearing. Unfortunately, the bill, even if it is amended by
this amendment, still will not contain an exclusivity provision to make
this the exclusive law of the land for insider trading.
While my amendment does not make this bill perfect, it does allow for
Congress to exercise its Article I authority to produce a comprehensive
insider trading law for the first time and does so in a bipartisan
manner that simply intends, we believe, to codify current insider
trading law without expanding liability to good-faith people innocent
under the law.
Mr. Chair, I urge its adoption, and I thank the bill's sponsor for
working with us on it.
Mr. Chair, I yield back the balance of my time.
Ms. WATERS. Mr. Chair, I claim the time in opposition to the
amendment, even though I am not opposed to it.
The Acting CHAIR (Mr. Kennedy). Without objection, the gentlewoman
from California is recognized for 5 minutes.
There was no objection.
Ms. WATERS. Mr. Chair, I yield myself such time as I may consume.
First, I thank Ranking Member McHenry for offering this amendment to
H.R. 2534 to help further ensure that this commonsense bill codifies
the law against insider trading in a fair manner.
When we marked up the bill in committee in May, I understood that my
Republican colleagues had several concerns with the bill but
nevertheless voiced their support in hopes of having those concerns
addressed before the bill made its way to the House floor.
At the end of the day, those concerns amounted to wanting additional
clarity that H.R. 2534 reflected the current judge-made law against
insider trading, aside from the controversial 2014 appeals court
decision that has been subject to criticism from many sides.
After months of discussion with the bill's sponsor, Representative
Himes, Ranking Member McHenry has crafted this amendment to do just
that. In particular, the amendment would clarify that the existing law
that requires the SEC to establish some personal benefit to a tipper in
cases involving tipper and tippee liability; clarify that the material,
nonpublic information that forms the basis of liability may be related
to either a specific security or to any security if that information
would have or reasonably be expected to have a material effect on the
market price of that security; and remove the rule of construction to
avoid confusion and ambiguity and to ensure that this act is not the
exclusive means by which the SEC, the Department of Justice, or private
litigants may pursue insider trading.
If the amendment is accepted, I believe that the bill would provide
the SEC with clear additional authority to bring to justice corporate
insiders and others who take unfair advantage of confidential
information. In addition, because the bill uses the same terms
identified in the current case law against insider trading, the SEC and
market participants can easily understand what those terms mean.
Again, Mr. Chair, I thank Ranking Member McHenry for strengthening
the bill, and I urge my colleagues to join me in supporting this
amendment.
Mr. Chair, I yield the balance of my time to the gentleman from
Connecticut (Mr. Himes), the sponsor of this important legislation.
Mr. HIMES. Mr. Chairman, what is the balance of time available?
The Acting CHAIR. The gentlewoman from California has 2\1/2\ minutes
remaining.
Mr. HIMES. Mr. Chairman, I thank Ranking Member Waters for yielding
me time.
I rise very briefly to welcome the amendment by Mr. McHenry. Mr.
McHenry raised four substantive points. Three of those points are
incorporated in this amendment, which we are very happy to accept.
I think it is, again, not a compromise, but an improvement of the
bill.
In my very little remaining time, we did have discussions about
exclusivity. As the ranking member knows, the idea here is to create a
law under which insider trading is prosecuted. That is the objective.
As the ranking member knows, it is a fairly complicated situation
when including specific exclusivity language. Ultimately, that was not
included in the ranking member's proposed amendment here, but we should
continue to work together to make sure that this is about clarifying
and simplifying and making more efficient rather than making more
complex.
Ms. WATERS. Mr. Chair, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from North Carolina (Mr. McHenry).
The amendment was agreed to.
Amendment No. 2 Offered by Mr. Huizenga
The Acting CHAIR. It is now in order to consider amendment No. 2
printed in House Report 116-320.
Mr. HUIZENGA. Mr. Chair, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 1, line 10, strike ``Aware of'' and insert ``Using''.
Page 1, line 14, strike ``aware of'' and insert ``using''.
Page 2, line 22, strike ``aware of'' and insert ``using''.
Page 2, beginning on line 24, strike ``aware of'' and
insert ``using''.
Page 3, line 3, strike ``aware of'' and insert ``using''.
Page 3, line 23, strike ``aware of'' and insert ``using''.
The Acting CHAIR. Pursuant to House Resolution 739, the gentleman
from Michigan (Mr. Huizenga) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Michigan.
Mr. HUIZENGA. Mr. Chair, I yield myself such time as I may consume.
Mr. Chair, I will be brief. I am concerned that the bill before us
today focuses specifically on awareness of information rather than the
use of wrongful information in connection with security trading.
[[Page H9277]]
Specifically, this bill defines trading while ``aware'' of material
and nonpublic information or communicating material and nonpublic
information as wrongful only if the information was obtained by way of,
or its communication or use would constitute: theft, bribery,
misrepresentation, espionage; a violation of Federal computer data and
intellectual property protection and privacy laws; conversion,
misappropriation, or other deceptive means; and any breach of a
fiduciary duty, a contractual relationship, a code of conduct, or a
personal confidence or trust.
A person violates the bill's prohibitions on trading with and
communicating material on nonpublic information so long as this person
``knew'' the information was wrongfully obtained, actively avoided
gaining such knowledge, or recklessly disregarded the wrongful use,
communication, or obtainment of this information.
It does not matter, under the bill, whether they know the method by
which the information was obtained or communicated or if any benefit
actually came from communication of the information.
In short, Mr. Chair, I believe that this would, in turn, allow
activist judges and prosecutors to go after individuals regardless of
their intention or actual profit from wrongful actions.
That is why my amendment is very simple. It would strike all
occurrences of the phrase ``aware of'' and insert the word ``using.''
In other words, you can be aware of something, but if you are not going
to actually use that information, why would you be held to a criminal
standard?
My amendment would have the effect of limiting who can be prosecuted
under this bill to people who actually use wrongful information to gain
a profit.
As we all know, in our lives, there are all kinds of rumors around us
all the time, whether it is about our work life or our family or
whatever might be going on, somebody in the neighborhood. It is hard to
know what information is actually true or actually accurate.
What we have currently is this assumption that being aware of
something makes you criminally liable versus actually using that
information.
The current bill could allow prosecution of people who traded and are
simply aware of information but perhaps would have traded regardless of
their awareness of that information.
I am prepared to support this underlying bill with the adoption of my
amendment.
I was pleased to see the adoption of the amendment from the gentleman
from North Carolina (Mr. McHenry). I believe these are perfecting
amendments. I believe that these are issues that need to be further
addressed.
While I, too, have some concerns about exclusivity and some of the
other things that the gentleman from North Carolina (Mr. McHenry)
discussed, I believe that this particular issue is of significance, and
it is sufficient enough and significant enough to pull my support
across the finish line as we move forward on this.
Mr. Chair, I urge all of my colleagues to accept this perfecting
amendment, and I yield back the balance of my time.
Ms. WATERS. Mr. Chair, I rise in opposition to the amendment.
The Acting CHAIR. The gentlewoman from California is recognized for 5
minutes.
Ms. WATERS. Mr. Chair, I strongly oppose Representative Huizenga's
amendment that replaces the bill's standard of illegal insider trading
while ``aware of'' material, nonpublic information with trading while
``using'' material, nonpublic information.
This narrower standard is inconsistent with current law, would
severely weaken the bill, and would create substantial enforcement
hurdles to the benefit of bad actors and to the detriment of the SEC.
If the amendment is adopted, the SEC would have to prove that the
reason the defendant traded was because of a specific piece of
information. That means that the SEC would have a hard time proving its
case in court unless it had an email from a defendant explaining his
motive for trading. Not many bad actors engaging in illegal insider
trading are that dumb.
Moreover, such a change would benefit insider traders at hedge funds
or other market intelligence firms because they would merely have to
tell the judge that they had other reasons or data to support their
trade.
The SEC's existing rule 10b-5 clearly states that the appropriate
standard is awareness. Changing it to ``use,'' as Representative
Huizenga's amendment would do, dramatically and substantially weakens
the SEC's authority to prosecute insider trading.
Mr. Chair, I urge my colleagues to reject the amendment offered by
Mr. Huizenga.
Mr. Chair, I yield the balance of my time to the gentleman from
Connecticut (Mr. Himes), the sponsor of this important legislation.
Mr. HIMES. Mr. Chairman, I thank Chairwoman Waters for yielding me
the time.
I rise in reluctant opposition to this amendment because it has been
a hallmark of this process that I very much enjoyed working with Mr.
McHenry and Mr. Huizenga. The reason I rise in opposition is really
twofold or threefold.
Number one, as Mr. Huizenga may recall, the original draft of the
bill would make it prosecutable to prosecute somebody who is in
possession of material, nonpublic information. My Republican friends
correctly pointed out that we are often in possession of information
that we may not be aware of. Certainly, if you were to take a look at
my email inbox, you would know that to be true. So at the suggestion of
the Republicans, we changed the standard from ``in possession'' to
``aware of.''
While I know that Mr. Huizenga is acting in good faith, Chairwoman
Waters got it exactly right. If we go to a use standard, it would
require prosecutors to actually get inside the motivation of why
somebody made a trade. They would have to prove that you made this
trade because you had inside information.
In support of Mr. Huizenga's good faith, I understand where he is
coming from, but let's also face that the confluence of circumstances
where you have material, nonpublic information and you were going to do
that trade at precisely that moment is a very, very rare event.
While I understand where Mr. Huizenga is coming from, what I would
suggest is, instead of creating probably an impossible prosecutorial
burden, let's acknowledge that if in that very rare event where you
want to make a trade and you happen to be in possession of material,
nonpublic information, let that trade go by. That is rare enough that
it shouldn't in any way, I think, speaking as somebody who has spent
time in this industry, compromise the effectiveness or the efficiency
of our capital markets.
Again, reluctantly, I stand in opposition to Mr. Huizenga's
amendment. I hope he will nonetheless support the underlying bill.
Ms. WATERS. Mr. Chair, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Michigan (Mr. Huizenga).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Recorded Vote
Mr. HUIZENGA. Mr. Chair, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 196,
noes 231, not voting 9, as follows:
[Roll No. 648]
AYES--196
Abraham
Aderholt
Allen
Amash
Amodei
Armstrong
Arrington
Babin
Bacon
Baird
Balderson
Banks
Barr
Bergman
Bilirakis
Bishop (NC)
Bishop (UT)
Bost
Brady
Brooks (AL)
Brooks (IN)
Buchanan
Buck
Bucshon
Budd
Burchett
Burgess
Byrne
Calvert
Carter (GA)
Carter (TX)
Chabot
Cheney
Cline
Cloud
Cole
Collins (GA)
Comer
Conaway
Cook
Crawford
Crenshaw
Curtis
Davidson (OH)
Davis, Rodney
DesJarlais
Diaz-Balart
Duncan
Dunn
Emmer
Estes
Ferguson
Fitzpatrick
Fleischmann
Flores
Fortenberry
Foxx (NC)
Fulcher
Gaetz
Gallagher
Gianforte
Gibbs
Gohmert
Gonzalez (OH)
Gonzalez-Colon (PR)
Gooden
Granger
Graves (GA)
Graves (LA)
Graves (MO)
Green (TN)
Griffith
Grothman
Guest
[[Page H9278]]
Guthrie
Hagedorn
Harris
Hartzler
Hern, Kevin
Herrera Beutler
Hice (GA)
Higgins (LA)
Hill (AR)
Holding
Hollingsworth
Hudson
Huizenga
Hurd (TX)
Johnson (LA)
Johnson (OH)
Johnson (SD)
Jordan
Joyce (OH)
Joyce (PA)
Katko
Keller
Kelly (MS)
Kelly (PA)
King (IA)
King (NY)
Kinzinger
Kustoff (TN)
LaHood
LaMalfa
Lamborn
Latta
Lesko
Long
Loudermilk
Lucas
Luetkemeyer
Marchant
Marshall
Massie
Mast
McCarthy
McCaul
McClintock
McHenry
McKinley
Meadows
Meuser
Miller
Mitchell
Moolenaar
Mooney (WV)
Mullin
Murphy (NC)
Newhouse
Norman
Nunes
Olson
Palazzo
Palmer
Pence
Perry
Posey
Ratcliffe
Reed
Reschenthaler
Rice (SC)
Riggleman
Roby
Rodgers (WA)
Roe, David P.
Rogers (AL)
Rogers (KY)
Rooney (FL)
Rose, John W.
Rouzer
Roy
Rutherford
Scalise
Schweikert
Scott, Austin
Sensenbrenner
Shimkus
Simpson
Smith (MO)
Smith (NE)
Smith (NJ)
Smucker
Spano
Stauber
Stefanik
Steil
Steube
Stewart
Stivers
Taylor
Thompson (PA)
Thornberry
Timmons
Tipton
Turner
Upton
Wagner
Walberg
Walden
Walker
Walorski
Waltz
Watkins
Weber (TX)
Webster (FL)
Wenstrup
Westerman
Williams
Wilson (SC)
Wittman
Womack
Woodall
Wright
Yoho
Young
Zeldin
NOES--231
Adams
Aguilar
Allred
Axne
Barragan
Bass
Beatty
Bera
Beyer
Bishop (GA)
Blumenauer
Blunt Rochester
Bonamici
Boyle, Brendan F.
Brindisi
Brown (MD)
Brownley (CA)
Bustos
Butterfield
Carbajal
Cardenas
Carson (IN)
Case
Casten (IL)
Castor (FL)
Castro (TX)
Chu, Judy
Cicilline
Cisneros
Clark (MA)
Clarke (NY)
Clay
Cleaver
Clyburn
Cohen
Connolly
Cooper
Correa
Costa
Courtney
Cox (CA)
Craig
Crist
Crow
Cuellar
Cunningham
Davids (KS)
Davis (CA)
Davis, Danny K.
Dean
DeFazio
DeGette
DeLauro
DelBene
Delgado
Demings
DeSaulnier
Deutch
Dingell
Doggett
Doyle, Michael F.
Engel
Escobar
Eshoo
Espaillat
Evans
Finkenauer
Fletcher
Foster
Frankel
Fudge
Gallego
Garamendi
Garcia (IL)
Garcia (TX)
Golden
Gomez
Gonzalez (TX)
Gottheimer
Green, Al (TX)
Grijalva
Haaland
Harder (CA)
Hastings
Hayes
Heck
Higgins (NY)
Himes
Horn, Kendra S.
Horsford
Houlahan
Hoyer
Huffman
Jackson Lee
Jayapal
Jeffries
Johnson (GA)
Johnson (TX)
Kaptur
Keating
Kelly (IL)
Kennedy
Khanna
Kildee
Kilmer
Kim
Kind
Kirkpatrick
Krishnamoorthi
Kuster (NH)
Lamb
Langevin
Larsen (WA)
Larson (CT)
Lawrence
Lawson (FL)
Lee (CA)
Lee (NV)
Levin (CA)
Levin (MI)
Lewis
Lieu, Ted
Lipinski
Loebsack
Lofgren
Lowenthal
Lowey
Lujan
Luria
Lynch
Malinowski
Maloney, Carolyn B.
Maloney, Sean
Matsui
McAdams
McBath
McCollum
McEachin
McGovern
McNerney
Meeks
Meng
Moore
Morelle
Moulton
Mucarsel-Powell
Murphy (FL)
Nadler
Napolitano
Neal
Neguse
Norcross
Norton
O'Halleran
Ocasio-Cortez
Omar
Pallone
Panetta
Pappas
Pascrell
Payne
Perlmutter
Peters
Peterson
Phillips
Pingree
Plaskett
Pocan
Porter
Pressley
Price (NC)
Quigley
Raskin
Rice (NY)
Richmond
Rose (NY)
Rouda
Roybal-Allard
Ruiz
Ruppersberger
Rush
Ryan
Sablan
Sanchez
Sarbanes
Scanlon
Schakowsky
Schiff
Schneider
Schrader
Schrier
Scott (VA)
Scott, David
Sewell (AL)
Shalala
Sherman
Sherrill
Sires
Slotkin
Smith (WA)
Soto
Spanberger
Speier
Stanton
Stevens
Suozzi
Swalwell (CA)
Takano
Thompson (CA)
Thompson (MS)
Titus
Tlaib
Tonko
Torres (CA)
Torres Small (NM)
Trahan
Trone
Underwood
Van Drew
Vargas
Veasey
Vela
Velazquez
Visclosky
Wasserman Schultz
Waters
Watson Coleman
Welch
Wexton
Wild
Yarmuth
NOT VOTING--9
Biggs
Cartwright
Gabbard
Gosar
Hunter
Radewagen
San Nicolas
Serrano
Wilson (FL)
{time} 1442
Mses. McCOLLUM, FUDGE, Messrs. LOEBSACK, PETERS, SEAN PATRICK MALONEY
of New York, PHILLIPS, DANNY K. DAVIS of Illinois, Mrs. LURIA, Mses.
WASSERMAN SCHULTZ, MUCARSEL-POWELL, Messrs. MALINOWSKI, NADLER, ROSE of
New York, CICILLINE, CLYBURN, PAYNE, Ms. BASS, and Mrs. HAYES changed
their vote from ``aye'' to ``no.''
Messrs. BUCHANAN, LAMBORN and JOHNSON of Louisiana changed their vote
from ``no'' to ``aye.''
So the amendment was rejected.
The result of the vote was announced as above recorded.
The Acting CHAIR (Mr. Payne). There being no further amendments,
under the rule, the Committee rises.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
Kennedy) having assumed the chair, Mr. Payne, Acting Chair of the
Committee of the Whole House on the state of the Union, reported that
that Committee, having had under consideration the bill (H.R. 2534) to
amend the Securities Exchange Act of 1934 to prohibit certain
securities trading and related communications by those who possess
material, nonpublic information, and, pursuant to House Resolution 739,
he reported the bill, as amended by that resolution, back to the House
with a further amendment adopted in the Committee of the Whole.
The SPEAKER pro tempore. Under the rule, the previous question is
ordered.
The question is on the amendment.
The amendment was agreed to.
The SPEAKER pro tempore. The question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Ms. WATERS. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, this 5-
minute vote on passage of the bill will be followed by 5-minute votes
on ordering the previous question on House Resolution 741; and adoption
of House Resolution 741, if ordered.
The vote was taken by electronic device, and there were--yeas 410,
nays 13, not voting 7, as follows:
[Roll No. 649]
YEAS--410
Abraham
Adams
Aderholt
Aguilar
Allen
Allred
Amodei
Arrington
Axne
Babin
Bacon
Baird
Balderson
Banks
Barr
Barragan
Bass
Beatty
Bera
Bergman
Beyer
Bilirakis
Bishop (GA)
Bishop (UT)
Blumenauer
Blunt Rochester
Bonamici
Bost
Boyle, Brendan F.
Brady
Brindisi
Brooks (AL)
Brooks (IN)
Brown (MD)
Brownley (CA)
Buchanan
Buck
Bucshon
Budd
Burchett
Burgess
Bustos
Butterfield
Byrne
Calvert
Carbajal
Cardenas
Carson (IN)
Carter (GA)
Carter (TX)
Case
Casten (IL)
Castor (FL)
Castro (TX)
Chabot
Cheney
Chu, Judy
Cicilline
Cisneros
Clark (MA)
Clarke (NY)
Clay
Cleaver
Cline
Cloud
Clyburn
Cohen
Cole
Collins (GA)
Comer
Conaway
Connolly
Cook
Cooper
Correa
Costa
Courtney
Cox (CA)
Craig
Crawford
Crenshaw
Crist
Crow
Cuellar
Cunningham
Curtis
Davids (KS)
Davis (CA)
Davis, Danny K.
Davis, Rodney
Dean
DeFazio
DeGette
DeLauro
DelBene
Delgado
Demings
DeSaulnier
DesJarlais
Deutch
Diaz-Balart
Dingell
Doggett
Doyle, Michael F.
Duncan
Dunn
Emmer
Engel
Escobar
Espaillat
Estes
Evans
Ferguson
Finkenauer
Fitzpatrick
Fleischmann
Fletcher
Flores
Fortenberry
Foster
Foxx (NC)
Frankel
Fudge
Fulcher
Gaetz
Gallagher
Gallego
Garamendi
Garcia (IL)
Garcia (TX)
Gianforte
Gibbs
Gohmert
Golden
Gomez
Gonzalez (OH)
Gonzalez (TX)
Gooden
Gottheimer
Granger
Graves (GA)
Graves (LA)
Graves (MO)
Green (TN)
Green, Al (TX)
Grijalva
Grothman
Guest
Guthrie
Haaland
Hagedorn
Harder (CA)
Hartzler
Hastings
Hayes
Heck
Hern, Kevin
Herrera Beutler
Hice (GA)
Higgins (LA)
Higgins (NY)
Himes
Holding
Hollingsworth
Horn, Kendra S.
Horsford
Houlahan
Hoyer
Hudson
Huffman
Hurd (TX)
Jackson Lee
Jayapal
Jeffries
Johnson (GA)
Johnson (LA)
Johnson (OH)
Johnson (SD)
Johnson (TX)
Jordan
Joyce (OH)
Joyce (PA)
Kaptur
Katko
Keating
Keller
Kelly (IL)
Kelly (MS)
Kelly (PA)
Kennedy
Khanna
Kildee
Kilmer
Kim
Kind
King (NY)
Kinzinger
Kirkpatrick
Krishnamoorthi
Kuster (NH)
Kustoff (TN)
LaHood
LaMalfa
Lamb
Lamborn
Langevin
Larsen (WA)
Larson (CT)
Latta
Lawrence
Lawson (FL)
Lee (CA)
Lee (NV)
Lesko
Levin (CA)
Levin (MI)
Lewis
Lieu, Ted
Lipinski
Loebsack
Lofgren
Long
Loudermilk
Lowenthal
Lowey
Lucas
Luetkemeyer
Lujan
Luria
Lynch
Malinowski
Maloney, Carolyn B.
Maloney, Sean
Marchant
Marshall
Mast
Matsui
McAdams
McBath
McCarthy
McCaul
McClintock
McCollum
[[Page H9279]]
McEachin
McGovern
McHenry
McKinley
McNerney
Meadows
Meeks
Meng
Meuser
Miller
Mitchell
Moolenaar
Mooney (WV)
Moore
Morelle
Moulton
Mucarsel-Powell
Mullin
Murphy (FL)
Murphy (NC)
Nadler
Napolitano
Neal
Neguse
Newhouse
Norcross
Norman
Nunes
O'Halleran
Ocasio-Cortez
Olson
Omar
Palazzo
Pallone
Palmer
Panetta
Pappas
Pascrell
Payne
Pence
Perlmutter
Perry
Peters
Peterson
Phillips
Pingree
Pocan
Porter
Posey
Pressley
Price (NC)
Quigley
Raskin
Ratcliffe
Reschenthaler
Rice (NY)
Rice (SC)
Richmond
Riggleman
Roby
Rodgers (WA)
Roe, David P.
Rogers (AL)
Rogers (KY)
Rooney (FL)
Rose (NY)
Rose, John W.
Rouda
Rouzer
Roybal-Allard
Ruiz
Ruppersberger
Rush
Rutherford
Ryan
Sanchez
Sarbanes
Scalise
Scanlon
Schakowsky
Schiff
Schneider
Schrader
Schrier
Schweikert
Scott (VA)
Scott, Austin
Scott, David
Sensenbrenner
Sewell (AL)
Shalala
Sherman
Sherrill
Shimkus
Simpson
Sires
Slotkin
Smith (MO)
Smith (NE)
Smith (NJ)
Smith (WA)
Smucker
Soto
Spanberger
Spano
Speier
Stanton
Stauber
Stefanik
Steil
Steube
Stevens
Stewart
Stivers
Suozzi
Swalwell (CA)
Takano
Taylor
Thompson (CA)
Thompson (MS)
Thompson (PA)
Thornberry
Timmons
Tipton
Titus
Tlaib
Tonko
Torres (CA)
Torres Small (NM)
Trahan
Trone
Turner
Underwood
Upton
Van Drew
Vargas
Veasey
Vela
Velazquez
Visclosky
Wagner
Walberg
Walden
Walker
Walorski
Waltz
Wasserman Schultz
Waters
Watkins
Watson Coleman
Weber (TX)
Webster (FL)
Welch
Wenstrup
Westerman
Wexton
Wild
Williams
Wilson (FL)
Wilson (SC)
Wittman
Womack
Woodall
Wright
Yarmuth
Young
Zeldin
NAYS--13
Amash
Armstrong
Biggs
Bishop (NC)
Davidson (OH)
Griffith
Harris
Hill (AR)
Huizenga
King (IA)
Massie
Roy
Yoho
NOT VOTING--7
Cartwright
Eshoo
Gabbard
Gosar
Hunter
Reed
Serrano
{time} 1453
Mr. CRAWFORD changed his vote from ``nay'' to ``yea.''
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Stated for:
Ms. ESHOO. Mr. Speaker, I was unable to be present during roll call
vote number 649. Had I been present, I would have voted: on roll call
vote number 649, YES.
____________________