Just ten weeks after calling for it in his State of the Union address, President Barack Obama has signed into law a bill banning insider trading on Congressional knowledge by members of Congress.
The Stop Trading on Congressional Knowledge, or STOCK Act, was passed unanimously by the Senate and nearly unanimously (417-2) by the House. Highlighting the bill’s bipartisan nature was the presence of Sen. Scott Brown, R-Mass., at the signing ceremony today.
What the law specifically prevents is trading on confidential information received by lawmakers as members of Congress. This ban carries over to legislative aides and officials in both the executive and judicial branches. It requires them to disclose the purchase or sale of stocks, bonds, commodity futures, and other securities within 45 days, instead of the current rule of one year. They must also disclose mortgage terms, and are forbidden from receiving special access to initial public stock offerings.
Attempts to include a provision to force “political intelligence” firms to register like lobbyists stalled, replaced by a one-year study of these firms.
For more information, read this New York Times blog post.
– Benjamin Nanamaker, InvestorPlace Money & Politics Editor
The opinions contained in this column are solely those of the writer.
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