Last month the House of Representatives passed the Insider Trading Prohibition Act by a whopping bipartisan 410-13 vote. As Lyle Roberts explains in today's WSJ, it's a bad bill:
The House claims it is merely codifying and clarifying existing law, but ITPA actually turns it on its head. Because insider-trading law is based on antifraud statutes, courts have made clear that a defendant can’t be held liable unless he acted with intent to defraud or had a duty not to use the information for his own benefit. ITPA arguably does away with both of these sensible limitations. ...
If all of this were not enough, ITPA would not even become the exclusive basis for federal insider-trading actions. The Justice Department and the Securities and Exchange Commission would still be able to bring actions under the general antifraud provisions of the federal securities laws. In other words, the government could cherry-pick its preferred law based on the facts of the case. So much for clarity and consistency.