For several years running, insider trading has been among the most high-profile enforcement priorities for both DOJ and the SEC. Unlike most federal criminal law, insider trading remains undefined by statute, having instead been largely judge-made. Unsurprisingly, since the explosion of enforcement actions began, prosecutors and defendants have both pushed the courts to clarify (or even re-define) the boundaries of the law. Despite several recent rulings, however, the law remains complex and ambiguous.

In its December 2014 ruling in United States v. Newman, the Second Circuit significantly altered the landscape for insider trading prosecutions. Newman held that a tippee who trades on insider information must know that the tipper received a “personal benefit” to be liable for insider trading. The decision went further, though, in suggesting that the personal benefit must have pecuniary value. Several months later, in United States v. Salman, the Ninth Circuit rejected such a narrow definition of “personal benefit.” In December 2016, the Supreme Court unanimously sided with the Ninth Circuit holding that the personal benefit test is met when the tipper “makes a gift of confidential information to a trading relative or friend.” Nonetheless, Justice Alito’s opinion left significant questions unanswered – and the central holding of Newman unaltered.

Last week, in a speech to the Securities Bar, Judge Jed Rakoff – who authored the Ninth Circuit’s Salman opinion and has presided over several high-profile insider trading trials – urged lawmakers to take up insider trading legislation. In particular, Judge Rakoff argued that a broad prohibition similar to the European Union’s laws would benefit both the markets and the courts. As it turns out, there may now be a window for Congress to take up such legislation. Shortly before Judge Rakoff’s remarks, House Judiciary Committee Chairman Bob Goodlatte announced the committee’s agenda for the 115th Congress. Rep. Goodlatte observed that he and Ranking Member John Conyers were “committed to passing bipartisan criminal justice reform.” Rep. Goodlatte considered it “imperative [to] continually examine federal criminal laws” in conjunction with this effort. Although past Congressional efforts to codify insider trading laws have failed, Goodlatte’s remarks suggest that there may be an opportunity to try again. And some observers are optimistic that a reform bill could pass this year.

What might such a reform bill look like? Judge Rakoff spoke approvingly of the EU’s approach that focuses on equal access to market information rather than U.S. law’s focus on the insider’s fiduciary duty. Specifically, the EU prohibits anyone from trading on information “that person knows, or ought to have known, [is] insider information.” Thus, the focus is on the information itself, rather than the source. Such an approach would eliminate disputes over the “personal benefit” test. It would also reverse Newman’s requirement that the tippee know of the tipper’s benefit. While the question of whether a trader “should have known” a tip to be insider information might be problematic, the insider trading statute – like other federal statutes – could define knowledge to include deliberate indifference or reckless disregard.

A uniform federal standard could bring much needed certainty to the law. Markets would benefit from a definition that protects equal access to market-moving information. Prosecutors would almost certainly be pleased with the expanded scope of proscribed conduct. And traders would have a clear, common-sense rule to guide their conduct.