U.S. Senator Kirsten Gillibrand (D-NY), announced today with Senators Jon Tester (D-MT) and Debbie Stabenow (D-MI), all long time advocates for increasing government transparency and accountability, that they are working with several of their Senate colleagues in introducing the STOCK Act 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.
"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 introduce and pass this common sense measure to increase government transparency and accountability."
"Members of Congress are public servants who should be serving the public, not themselves," said Senator 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."
"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."
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.