Insider Trading Proscriptions Act of 1987

Summary

Insider Trading Proscriptions Act of 1987 - Amends the Securities Exchange Act of 1934 to prohibit any person from using any material, nonpublic information to purchase or sell any security if such person knows or is reckless in not knowing that such information has been obtained wrongfully, or if the purchase or sale would constitute a wrongful use of such information. Establishes a rebuttable presumption that anyone who purchases or sells a security while in possession of material, nonpublic information used that information in connection with such purchase or sale. Prohibits any person from communicating material, nonpublic information relating to a security to another person knowing, or being reckless in not knowing, that the information would be used to violate the prohibition of this Act. Prohibits any person who plans to acquire or dispose of an issuer of securities or a material block of an issuer's securities or assets from communicating information about such plans for the purpose of influencing or encouraging another person to purchase or sell such securities, unless such other person is acting on behalf of or as part of a group with the transacting person, or such communication is made in the course of a good faith solicitation to such other person to act on behalf of such a group. Specifies that no person shall be liable for violations of such prohibitions solely by reason of the fact that such person controls or employs a person who has violated such prohibitions, if such controlling person or employer neither participated in nor directly or indirectly induced the acts constituting the violation. Authorizes the Securities and Exchange Commission to issue rules implementing this Act and to grant appropriate exemptions. Establishes a private cause of action for anyone injured by a violation of this Act in connection with the purchase or sale of any security. Specifies that a person shall be deemed to be injured by such a violation if the person purchased or sold securities contemporaneously with the securities transactions on which the violation is based. Limits the liability of a defendant to the profit obtained or the loss avoided through the violation minus any amounts the defendant may be required to disgorge pursuant to a court order obtained by the Commission in a proceeding relating to the same transaction or transactions. Specifies that this Act shall provide the exclusive standards by which the wrongful communication of material, nonpublic information in connection with the purchase or sale of a security shall be addressed.

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1 official file

• Introduced in Senate

  summary · EN · 17 June 1987

  Open at official source

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