Senators to Offer Bill to Define Insider Trading
WASHINGTON (AP) _ Two senior members of the Senate Banking Committee will introduce legislation Wednesday to define illegal insider trading in stocks, a crime that carries no firm definition.
Sens. Donald Riegle, D-Mich., and Alfonse D’Amato, R-N.Y., called a news conference to unveil their legislation. Riegle is chairman of the committee’s securities subcommittee.
Insider trading now is defined only as trading on material, non-public information that could give the user an unfair advantage in buying and selling securities. The exact elements of insider trading aren’t specified.
An effort to amend the definition is considered extremely important on Wall Street, which has been affected by a major insider trading scandal that is still evolving.
Last November the Securities and Exchange Commission used existing insider trading legislation in a complaint against Ivan F. Boesky, a well-known stock speculator. Without admitting or denying guilt, Boesky paid the SEC a record $100 million in penalties to settle insider trading charges.
The SEC has said it does not particularly want a specific definition of insider trading because the vagueness gives it flexibility in pursuing cases.
Steve Harris, a Riegle aide, said the senator feels the term deserves a clear definition and also is concerned that the Supreme Court may deal prosecutions a setback because of the vague definition.