WASHINGTON -- U.S. Senator Ben Cardin (D-MD) has co-sponsored legislation to prohibit members of Congress from engaging in insider trading. The Stop Trading on Congressional Knowledge (STOCK) Act, S.1903, redefines insider trading to include knowledge gained from congressional work and service, creates transparency rules and reporting requirements, and requires "political intelligence consultants" to register as lobbyists. Currently, insider trading by members of Congress and their staffs is not prohibited by the Securities Exchange Act or congressional rules.
"This law makes crystal clear to members of Congress and their staffs that trading on ‘inside information’ will not be tolerated and that they will be held accountable,” said Senator Cardin. “Members of Congress must not be allowed to benefit financially or personally from information received because of their official duties.”
The STOCK Act will:
· Ban Insider Trading by Members of Congress
The legislation amends the definition of insider trading to include purchasing assets on the basis of knowledge of a legislative action gained from a member or employee of Congress or by virtue of being a member or employee of Congress. This would require the Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC) to make regulations to prevent such use and go after cases of insider trading by members of Congress.
· Create New Reporting Requirements
The legislation amends Senate rules to make it a violation of the rules to provide information with the understanding that it will be used to buy or sell an asset or to use knowledge gained from congressional work to buy or sell a stock or commodity. It would also require reporting within 90 days of a member or employee making a transaction of more than $1,000 to provide oversight of possible violations or inappropriate practices.
· Require Registration of "Political Intelligence Consultants"
The legislation would require "political intelligence consultants" -- individuals contacting legislative and executive branch employees to acquire market intelligence regarding a proposed rule, regulation or legislation -- to register as lobbyists, and would make them subject to the same reporting requirements and other restrictions imposed on lobbyists.
The STOCK Act is also cosponsored by U.S. Senators Kirsten Gillibrand (D-NY), Debbie Stabenow(D-MI), Jon Tester (D-MT), Richard Durbin (D-IL), Claire McCaskill (D-MO), Amy Klobuchar (D-MN), Marco Rubio (R-FL), Richard Blumenthal (D-CT), Jack Reed (D-RI), Olympia Snowe (R-ME), and Bill Nelson (D-FL).