Senator Jon Tester today announced that he will introduce a new measure aimed at prohibiting members of Congress and their employees from stock market trading based on inside information.
Federal law currently does not prohibit U.S. Representatives, Senators and their staffers from trading stocks based on privileged information such as the status of legislation and pending government regulations.
Tester's bill, the Stop Trading on Congressional Knowledge Act, prevents members and employees from using knowledge gained from Congressional work and service for their personal financial benefit. The STOCK Act creates new rules and reporting requirements that improve transparency. It also requires certain "consultants" who contact congressional offices for information that may affect the stocks of their clients to register as lobbyists.
"Members of Congress are public servants who should be serving the public, not themselves," said Tester, the first U.S. Senator to post his public schedule online and to conduct regular ethics audits of his office. "Our bill is simply a common-sense plan to bring more sunlight to government and to bring accountability to folks who abuse the public's trust. I expect this measure to win bipartisan support and usher in a new level of transparency in Congress."
Tester, who wrote the legislation with Senator Kirsten Gillibrand, D-N.Y., added that members of Congress should be playing by the same rules as everyone else.
Tester's and Gillibrand's STOCK Act will:
* Ban insider trading by altering its definition 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,
* Amend Senate rules to make it a violation to provide information knowing that it will be used to buy or sell an asset,
* Require "political intelligence consultants" -- those individuals contacting legislative and executive branch employees to acquire market intelligence regarding a proposed rule, regulation or legislation -- to register as lobbyists
Recent media reports have raised the possibility of members of Congress using knowledge gained from their work to make business transactions.