U.S. Senator Kirsten Gillibrand (D-NY) and a bipartisan group of Senators Marco Rubio (R-FL), Jon Tester (D-MT), Debbie Stabenow (D-MI), Claire McCaskill (D-MO), Amy Klobuchar (D-MN), Dick Durbin (D-IL) and Richard Blumenthal (D-CT) today announced the introduction of their new STOCK Act legislation to prohibit members of Congress from engaging in insider trading. The legislation redefines insider trading to include knowledge gained from Congressional work and service, creates 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. 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 American people deserve the right to know their lawmakers' only interest is what's best for the country, not their own financial interests," said Senator Gillibrand, the first member of the House of Representatives to post her official daily schedule, all earmark requests and personal financial disclosure online. "Members of Congress should not have a different set of rules -- they should be treated the same as everyone else. This is not a Democratic or Republican idea - it is just a good idea that can create wide bipartisan support. I look forward to working with my Senate colleagues to pass this common sense measure to increase government transparency and accountability."
"Members of Congress and their employees have to play by the same rules as everyone else, and this bill keeps the field level," said Senator Tester, the first U.S. Senator to post his public schedule online and to conduct regular ethics audits of his office. "No one in Congress should use inside information to benefit their personal finances. The STOCK Act is about preserving the integrity and public trust all Americans deserve."??"This law makes crystal clear that Members of Congress must not be exempt from laws everyone else has to follow," said Senator Stabenow. "Any Member of Congress abusing his or her position for financial gain must be held accountable. Congress needs to fix this glaring inequity immediately."??"This is an area that needs extra transparency. The reporting requirements will provide just that," Senator McCaskill said.??"This is common sense legislation that will help strengthen our democracy," Senator Klobuchar said. "I hope my colleagues on both sides of the aisle will come together to support this important bill."??"The insidious corrupting impact of insider trading is the same for members of Congress -- no less than anyone else -- and the same prohibitions should apply," Senator Blumenthal said. "Congress must be held to the same standards of conduct as everyone else, and we owe our constituents nothing less than transparency and accountability. I look forward to working with colleagues on both sides of the aisle to pass the bipartisan STOCK legislation."
The Senators' version of the STOCK Act will do the following:
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 SEC and 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.