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Bill

S 5223

NO PROFIT Act

119th Congress Introduced by Ruben Gallego and 1 co-sponsor

The bill makes it illegal to trade on prioritized, nonpublic information obtained from official social media accounts of government officials or their close affiliates.

Introduced in Senate
0
WeVote Research Nonpartisan
Bill Summary · S 5223

Summary of Bill: S.5223 – No Profit Act (NO PROFIT Act)

Purpose and intent

  • The NO PROFIT Act aims to prohibit trading of certain financial instruments when a person is aware of prioritized, nonpublic information contained in covered social media accounts controlled by government officials or closely connected parties.
  • The overarching goal is to curb trading based on privileged information disseminated through official social media channels and to restrict platforms from providing preferential access to such information.

Key definitions (Section 2)

  • Covered government official: Includes the President, Vice President, Members or employees of Congress, executive branch employees, judicial officers or staff, and extends to individuals who have recently separated from such positions (180-day grace period).
  • Covered social media account: An account/profile owned or controlled by a covered official or their close affiliates, or used by them to communicate with the public, or maintained by a federal agency or government instrumentality.
  • Prioritized access / prioritized covered information: Access to communications that occurs before general availability or on materially different terms (timing, latency, format, accessibility) compared with ordinary users.
  • Material information: Information with substantial likelihood that a reasonable investor would consider it important for investment decisions.
  • Generally available: Information disseminated through standard, no-cost platform interfaces accessible to ordinary users.
  • Speculative information market: Markets or platforms where outcomes or events influence the value of contracts or payments.
  • Other terms: Includes specifics on commodities, securities, security-based swaps, futures, options, and related enforcement mechanisms.

Prohibition on trading with prioritized information (Section 3)

  • Prohibition: It is unlawful for any person to: 1) Purchase, sell, or enter into transactions involving securities, security-based swaps, commodities, futures, options, swaps, or speculative information market contracts while aware of prioritized covered information and before it is generally available. 2) Cause or induce another person to do so. 3) Communicate prioritized covered information to another person knowing or reasonably believing that the recipient will trade on it while it is prioritized and not generally available.
  • Knowledge standard: A person is liable only if they knew or reasonably should have known that the prioritized information was obtained through prioritized access.
  • No fiduciary duty required: Violations do not require breach of fiduciary or other duty of trust.
  • Enforcement: Violations involving securities/SEC-regulated activities may be enforced under the Securities Exchange Act (section 21A) by the SEC; violations involving commodities, futures, or speculative information markets may be enforced by the CFTC under applicable statutes.
  • Rulemaking deadline: The SEC and CFTC must jointly issue necessary rules within 180 days of enactment.

Prohibition on prioritized access to covered social media accounts (Section 4)

  • Prohibition on platforms: Social media platforms may not knowingly offer prioritized access to communications issued through a covered social media account.
  • Construction and exceptions:
    • Platforms may still offer prioritized access for non-covered accounts.
    • Algorithms that rank content for users, or delivery of information tailored to a user at no additional cost, are not restricted.
    • Fee-free prioritization for government/public health/public safety communications by a federal, state, or local agency or first responders in emergencies is allowed, subject to non-discrimination and no preferential timing beyond general availability.
    • Programmatic data access or APIs may be offered if terms are reasonable, non-discriminatory, do not provide early access, and do not confer timing advantages for those who pay or belong to a restricted class.
  • Civil penalties: Violations can result in civil penalties equal to the platform’s revenue earned from the prioritized access that caused the violation.
  • Enforcement: The Attorney General can sue in federal district court to recover penalties.

Practical implications and impact

  • For individuals: Covered officials and their immediate family members are the primary subjects due to the prioritization provisions. The bill seeks to prevent insiders from trading on nonpublic information obtained via official social media.
  • For investors: Clarifies that trading while aware of prioritized, nonpublic information is illegal, adding a new information channel (covered social media) to the list of nonpublic information. The scope includes securities, commodities, and related derivatives, plus speculative information market contracts.
  • For platforms: Social media platforms would face new prohibitions on providing prioritized access to communications from covered accounts and could incur penalties equal to revenue derived from such access.
  • For regulators: Requires joint rulemaking by the SEC and CFTC within six months of enactment to operationalize the prohibition and definitions.

Timeline and procedural notes

  • Introduction and referral: Bill introduced in the Senate on August 3, 2026, and referred to the Committee on Banking, Housing, and Urban Affairs.
  • Rulemaking deadline: Not later than 180 days after enactment, the SEC and CFTC must issue necessary rules to implement the provisions.
  • Enactment status: As of the provided text, the bill has been introduced and is pending committee action.

If you’d like, I can break down a side-by-side comparison with existing insider trading laws or provide a potential impact assessment for financial institutions and social media platforms.

Compiled from official sources — confirm details with the bill’s official record.

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