(a) Prohibition. Employees may not engage in financial transactions using nonpublic information, nor allow the improper use of nonpublic information to further their own private interests or those of another, whether through advice or recommendation, or by knowing unauthorized disclosure.
(b) Definition of nonpublic information. For purposes of this section, nonpublic information is information that the employee gains by reason of Federal employment and that the employee knows or reasonably should know has not been made available to the general public. It includes information that the employee knows or reasonably should know:
(1) Is routinely exempt from disclosure under 5 U.S.C. 552 or otherwise protected from disclosure by statute, Executive order, or regulation;
(2) Is designated as confidential by an agency; or
(3) Has not actually been disseminated to the general public and is not authorized to be made available to the public on request.
Example 1 to paragraph (b): A Navy employee learns in the course of official duties that a small corporation will be awarded a Navy contract for electrical test equipment. The employee may not take any action to purchase stock in the corporation or its suppliers, and may not advise friends or relatives to do so until after public announcement of the award. Such actions could violate Federal securities statutes as well as this section.
Example 2 to paragraph (b): A General Services Administration employee involved in evaluating proposals for a construction contract cannot disclose the terms of a competing proposal to a friend employed by a company bidding on the work. Prior to award of the contract, bid or proposal information is nonpublic information specifically protected by 41 U.S.C. 2102.
Example 3 to paragraph (b): An employee is a member of a source selection team assigned to review the proposals submitted by several companies in response to an Army solicitation for spare parts. As a member of the evaluation team, the employee has access to proprietary information regarding the production methods of Alpha Corporation, one of the competitors. The employee may not use that information to assist Beta Company in drafting a proposal to compete for a Navy spare parts contract. The Federal Acquisition Regulation in 48 CFR parts 3, 14, and 15 restricts the release of information related to procurements and other contractor information that must be protected under 18 U.S.C. 1905 and 41 U.S.C. 2102.
Example 4 to paragraph (b): An employee of the Nuclear Regulatory Commission inadvertently includes a document that is exempt from disclosure with a group of documents released in response to a Freedom of Information Act request. Regardless of whether the document is used improperly, the employee's disclosure does not violate this section because it was not a knowing unauthorized disclosure made for the purpose of furthering a private interest.
Example 5 to paragraph (b): An employee of the Army Corps of Engineers is actively involved in the activities of an organization whose goals relate to protection of the environment. The employee may not, other than as permitted by agency procedures, give the organization or a newspaper reporter nonpublic information about long-range plans to build a particular dam.