Congressman Rodney Frelinghuysen (NJ-11) today praised House passage of the "Stop Trading on Congressional Knowledge" Act, or the STOCK Act. Frelinghuysen is a cosponsor of the legislation which is designed to prevent lawmakers from using "inside knowledge' gained through their positions to profit in the stock market.
"Of course, "insider trading' is already prohibited under the rules of the House of Representatives. But, the STOCK Act would strengthen existing law by requiring additional financial disclosures by Members of Congress and other government employees. I strongly support this extra effort to restore public confidence.
"It is unacceptable for any Member of Congress, federal official or their staff to use non-public information for their own financial benefit. The American people need to be able to trust that officials at all levels of the federal government are living under the same rules they are and aren't using their position for profit in any way.
According to the House Ethics Committee, the STOCK Act would:
1. Prohibit Members and employees of Congress from buying or selling securities, swaps, security based swaps, or commodity futures, based on non-public information they obtain because of their status;
2. Prohibit executive and judicial branch officials from buying or selling stocks or other securities based on non-public information;
3. Require prompt reporting of financial transactions within 45 days following execution of a trade;
4. Restrict executive, legislative, and judicial employees from participating in IPOs not available to the public.
The U.S. Senate recently passed by a vote of 96 to 3 a similar version of the insider trading bill.