Leading Senate Democrats introduced sweeping legislation yesterday to clamp down on abuses in corporate takeovers and provide for stiff million-dollar fines and mandatory prison sentences for inside traders. Its chief sponsor, William Proxmire (D) of Wisconsin, the Senate Banking Committee chairman, said the bill aims to require more public disclosure on proposed takeovers and to punish inside traders who profit from information before it is available to the public.
The legislation would raise the maximum $100,000 fine for insider-trading cases to $1 million and extend prison sentences from five to 10 years.
While the bill is far reaching, it would not cover some key issues such as the takeover financing through so-called junk - or low-grade - high-yield bonds.
But the senators said coming congressional hearings will examine this financing and suggested there may be amendments on other issues approved before the bill goes to the Senate and House.