Lafayette Reporter

Sens. John Kennedy and Chris Van Hollen have reintroduced the Holding Foreign Insiders Accountable Act, a bipartisan bill aimed at aligning disclosure requirements for executives of foreign companies traded on U.S. stock exchanges with those of U.S.-based firms. The legislation seeks to curb insider trading by requiring foreign executives to disclose trades immediately.

"Insiders at companies in Beijing and Moscow have been able to avoid billions in losses on the U.S. stock exchange by playing by a different set of rules than Americans do," said Kennedy. "This insider trading comes at a cost to American investors."

Van Hollen added, "When corporate insiders sell their stocks, investors and the public have a right to know. Our legislation will ensure all corporate insiders are held to the same standard."

Currently, U.S. company executives must report their trades within two business days to the Securities and Exchange Commission (SEC). However, foreign executives face no such timely requirement and can file disclosures by paper, leading to delays that may facilitate insider trading.

The proposed amendment to Section 16(a) of the Securities Exchange Act would mandate electronic trade disclosures from foreign company executives within two business days, making this information publicly available as it is for U.S.-based firms.

Kennedy and Van Hollen previously outlined their bill in April 2023 in the Wall Street Journal. Reports from August 2022 revealed Chinese investors avoided significant losses through informed stock sales before market declines. Kennedy first introduced this act in May 2022.