NO PROFIT Act

The "No Preferential Release Of Federal Information for Transactions Act," or NO PROFIT Act, establishes new prohibitions related to trading on nonpublic information from government social media accounts. It defines "prioritized covered information" as material information from a covered social media account (controlled by government officials, their family, or federal agencies) that is obtained through prioritized access , meaning before it is generally available or on materially different terms than for the public. This bill seeks to ensure a level playing field in financial markets by preventing individuals from exploiting early access to government communications. Specifically, the bill makes it unlawful for any person to purchase or sell securities, commodities, or other financial instruments while aware of such prioritized covered information and before it becomes generally available. This prohibition extends to causing others to trade or communicating the information if the recipient is likely to trade on it. A violation does not require proof of a breach of fiduciary duty, only that the person knew or should have known the information was obtained through prioritized access. Furthermore, the NO PROFIT Act prohibits social media platforms from knowingly offering or selling prioritized access to communications from covered social media accounts. There are exceptions for algorithmic content delivery, public health/safety communications to government entities, and programmatic access that does not confer an advantage in timing or latency before general availability. Platforms found in violation face civil penalties equal to the revenue received from such prohibited prioritized access. The Securities and Exchange Commission and the Commodity Futures Trading Commission are directed to jointly issue rules to implement these provisions.