WASHINGTON, DC – Today U.S. Senator Amy Klobuchar announced that bipartisan legislation that would prohibit members of Congress from engaging in insider trading passed the Senate with a vote of 96-3. The STOCK Act redefines insider trading to include knowledge gained from Congressional work and service and creates new rules and reporting requirements. The bill is similar to legislation that Minnesota Congressman Tim Walz introduced in the House of Representatives. Earlier this week, Klobuchar called on her colleagues to support the bill during a speech on the Senate floor.
“No one is above the law in this country – least of all the lawmakers,”Klobuchar said. “This common sense bill will strengthen our democracy by ensuring no federal employee or member of Congress can profit from nonpublic information they’ve obtained through their position.”
Currently, insider trading by members of Congress and their staffs is not prohibited by the Securities Exchange Act or Congressional rules. In addition to revising the statute to enable the Securities and Exchange Commission to prosecute cases of insider trading by members of Congress, like a similar version in the House of Representatives, this legislation would also make it a violation of the rules of the House and Senate to engage in such an activity. This creates more accountability so that anyone who uses their role as a member of Congress to enrich themselves would be answerable not only to the Department of Justice and the Securities and Exchange Commission, but also to Congress’s own ethics rules.
The STOCK Act will do the following:
The STOCK Act Clearly Prohibits Insider Trading in Congress. Under the STOCK Act, members of Congress and their staff will explicitly be barred from buying or selling securities on the basis of non-public knowledge gained through their Congressional service – or from using that knowledge to tip off anyone else. The STOCK Act makes it clear that trading on non-public information would violate the duty of trust members of Congress and their staff owe their constituents by establishing a clear fiduciary responsibility.
The STOCK Act Significantly Strengthens Disclosure Requirements.Currently, members of Congress annually disclose the purchase or sale of securities and commodities. The STOCK Act not only imposes a tough 30 day disclosure requirement, but also requires that the information is published online to ensure complete transparency and easy public access to the information.
The STOCK Act Requires GAO To Investigate Role Of “Political Intelligence” Firms. The STOCK Act requires the Government Accountability Office to investigate the role of “political intelligence” firms, which try to learn inside information from lawmakers and their staffs and sell that information along to private clients.