PROXMIRE OUTLINES INSIDER TRADING LEGISLATION
Senate Banking Committee Chairman
William Proxmire (D-Wis) said he planned to introduce
legislation shortly to require greater public disclosure of
corporate takeovers and fairer treatment for all shareholders.
    Speaking to the National Association of Manufacturers,
Proxmire said recent insider trading stock scandals increased
the chance that Congress will act to curb abuses.
    "We are proposing legislation that would provide for more
disclosure, would be fairer to all shareholders, and would
insure that takeovers are properly financed," he said.
    Among the provisions, the bill would reduce the threshold
for notifying the Securities and Exchange Commission that a
investor or group has acquired a percentage of stock in a
company to three pct from the current five pct threshold within
10 days, Proxmire said.
    In addition, there would be a pre-notificaton requirement
that an investor intended to aquire three pct that would have
to filed with the SEC.
    Proxmire said the pre-notification requirement was meant to
prevent arbitragers from having a jump on the general public in
knowing about coming takeover attempts.
    Proxmire said he would call for extending the period that a
tender offer must be kept open under the Williams Act to 60
business days from the current 20 business days.
    His bill would provide for private suits if the acquiring
company violated the time period on the tender offer.
    To correct abuses in the financing of takeovers, Proxmire
said the legislation would aim at insuring current margin
requirments are properly enforced.
    The Federal Reserve Board has a 50 pct margin requirement
for purchasing stock, but Proxmire said it is not generally
enforced in hostile takeovers.
    Rather, the groups or individuals leading a takeover
declare that they can raise the capital for a takeover without
actually putting any of their own money, Proxmire said.
    He said his bill would allow private suits for damages for
failure to meet the Federal Reserve's 50 pct margin
requirements.
    The bill also would require more disclose when several
investors form an alliance in a hostile takeover.
    "When Pickens and Icahn get together we want people to know
about it," Proxmire said.
    Proxmire said he favored the approach used in Britain
towards two-tiered tender offers that insures that all
shareholders recieve equal treatment.
    He said he expected amendments to the bill also would cover
defensive mechanisms such as green mail and poison pills.
    Proxmire said he intended to introduce his bill later this
month and predicted the Senate committee would act this spring.
    He said he was hopeful Congress could pass a bill this
year.
 Reuter
