1. Short title This Act may be cited as the Insider Trading Prohibition Act . 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: 16A. Prohibition on insider trading (a) Prohibition against trading securities while in possession 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 in possession 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) (referred to in this subsection as the ‘communicating person’), 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 in possession of such information