Rep. Stephen LynchStephen Francis LynchLawmakers seek answers on armed services' plans to address gun tracking Left warns Pelosi they'll take down Biden infrastructure bill Pelosi signals she won't move .5T bill without Senate-House deal MORE (D-Mass.) has introduced legislation to formally establish insider trading as a crime.

Lynch, a member of the House Financial Services Committee, said his bill would spare the federal government from prosecuting insider trading cases under anti-fraud laws and court decisions. Under the measure, insider trading would be defined as buying or selling securities based on insider knowledge.

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The Massachusetts Democrat pointed to a December 2014 decision in the U.S. Court of Appeals for the Second Circuit, U.S. v. Newman, that lifted the convictions of two hedge fund portfolio managers.

"In the wake of the ill-advised Newman decision, it is important that Congress enact a robust insider trading statute that unequivocally defines insider trading as a federal crime," Lynch said in a statement. "It is obvious from the Newman case that we need clarity in this area in order to create a bright-line distinction between what is permissible and prohibited."