United States 116th Congress Status: In Committee 1 D cosponsors

S 2391 — Stock Buyback Reform and Worker Dividend Act of 2019

Last action — Committee on Banking, Housing, and Urban Affairs. Hearings held.

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  1. ✓
    Introduced
  2. 2
    In Committee
  3. 3
    Passed Senate
  4. 4
    Passed House
  5. 5
    To Executive
  6. 6
    Enacted

This bill died with 116th Congress. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.

This bill is no longer active — its legislative session has ended, so there is no live prognosis. It would have to be reintroduced in the current session to move again.

Summary

Stock Buyback Reform and Worker Dividend Act of 2019 This bill revises requirements related to stock buybacks (i.e., a company repurchasing shares of common stock). Specifically, issuers of securities must provide an annual dividend to non-executive employees in certain circumstances. The calculation of this dividend is based on (1) the amount the issuer spends on stock buybacks, (2) increases in dividends, and (3) any special dividends. Additionally, an issuer is prohibited from repurchasing shares unless details of the buyback are disclosed to the Securities and Exchange Commission (SEC), including the rationale for the repurchase. The buyback must also comply with certain purchasing requirements. The bill lowers the allowed daily amount of repurchased shares. Executive officers may not sell shares for seven days beginning on the date of an announced buyback, subject to certain exceptions. The SEC may enforce these provisions. Employees are afforded a private right of action against an issuer regarding required employee dividends.

Bill Text

How this bill changes current law

5 changes Share ↗

Compared against current U.S. Code AI-generated reading aid — verify against the official bill.

The bill adds new disclosure and compliance requirements for stock repurchases by issuers, repealing existing safe harbor protections.

  • 15 U.S.C. 78i

    SEC. 9A. ISSUER COMMON STOCK REPURCHASES. (a) Definitions.-- (1) In general.--Except as provided in paragraph (2), in this section, the definitions of terms in section 240.10b-18(a) of title 17, Code of Federal Regulations, as in effect on the day before the date of enactment of this section, shall apply to any such term that appears in this section. (2) Covered purchase.--The term `covered purchase'-- (A) means a purchase (or any bid or limit order that would effect such purchase) of the common stock of an issuer (or an equivalent interest, including a unit of beneficial interest in a trust or limited partnership or a depository share) by or for the issuer or any affiliated purchaser (including riskless principal transactions); ...

    This insert establishes a new section that defines terms and sets requirements for stock repurchases by issuers.

  • 15 U.S.C. 78i

    SEC. 9A. ... (b) Requirement.-- (1) In general.--Except as provided in paragraph (2), it shall be unlawful as a fraudulent, deceptive, or manipulative act or practice under section 9(a)(2) or 10(b) of this Act or section 240.10b-5 of title 17, Code of Federal Regulations, or any successor regulation, for an issuer or affiliated purchaser of the issuer to effect a repurchase of the common stock of the issuer unless the issuer or affiliated purchaser, as applicable, complies with the requirements under this section; ...

    This change introduces new unlawful practices regarding stock repurchases unless specific requirements are met.

  • 15 U.S.C. 78i

    SEC. 9A. ... (c) Disclosure.-- (1) In general.--Any issuer or affiliated purchaser of the issuer that seeks to effect a plan or program to repurchase common stock of the issuer shall, on or before the date on which the issuer or affiliated purchaser begins repurchasing common stock under the plan or program, disclose to the Commission on a Form 8-K a filing that includes-- ...

    This requires issuers to disclose extensive information regarding stock repurchase plans before they commence.

  • 15 U.S.C. 78i

    SEC. 9A. ... (c)(2) Weekly disclosure.--(A) In general.--In addition to the requirement under paragraph (1), each issuer that effects a repurchase of common stock of the issuer in any calendar week shall, not later than the last business day of the following week, file with the Commission a public disclosure filing ...

    This mandates weekly disclosures related to stock repurchases, including the number of shares repurchased and details on the brokers involved.

  • Safe Harbor

    The bill repeals the safe harbor provisions that previously allowed unrestricted stock buybacks under certain conditions.

Action History

  1. Committee on Banking, Housing, and Urban Affairs. Hearings held. Hearings printed: S.Hrg. 116-456.

  2. Committee on Banking, Housing, and Urban Affairs. Hearings held.

  3. Introduced in Senate

  4. Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Sponsors

Sponsorship breakdown

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1 sponsors · 0 co-sponsors · 546 not signed on

Sponsors (1)

Co-sponsors (0)

None.

Not signed on (546)

546 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

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Subjects

finance labor
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Frequently asked questions

What does S 2391 do?
Stock Buyback Reform and Worker Dividend Act of 2019 This bill revises requirements related to stock buybacks (i.e., a company repurchasing shares of common stock). Specifically, issuers of securities must provide an annual dividend to non-executive employees in certain circumstances. The calculation of this dividend is based on (1) the amount the issuer spends on stock buybacks, (2) increases in dividends, and (3) any special dividends. Additionally, an issuer is prohibited from repurchasing shares unless details of the buyback are disclosed to the Securities and Exchange Commission (SEC), including the rationale for the repurchase. The buyback must also comply with certain purchasing requirements. The bill lowers the allowed daily amount of repurchased shares. Executive officers may not sell shares for seven days beginning on the date of an announced buyback, subject to certain exceptions. The SEC may enforce these provisions. Employees are afforded a private right of action against an issuer regarding required employee dividends.
Who sponsors S 2391?
S 2391 is sponsored by Brown, Sherrod (Democratic).
What is the current status of S 2391?
This bill died with 116th Congress. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
Where can I track S 2391?
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