Legislation to Rein in Abuse Is Moving Rapidly Through Both the House and Senate
WASHINGTON, D.C. – Seven reform groups sent letters today urging members of both the House of Representatives and Senate to join in the legislative drive to pass the “Stop Trading on Congressional Knowledge” (STOCK) Act. The measures – one in the House sponsored by Reps. Timothy Walz (D-Minn.) and Louise Slaughter (D-N.Y.) and two similar versions in the Senate by Sens. Scott Brown (R-Mass.) and Kirsten Gillibrand (D-N.Y.) – would prohibit members of Congress and their staffs from using information gleaned in the course of their official duties for insider trading in the stock market.
The Campaign Legal Center, Citizens for Responsibility and Ethics in Washington, Common Cause, Democracy 21, Public Citizen, the Sunlight Foundation and U.S. PIRG sent letters to Congress expressing dismay that congressional insider trading is not already illegal and encouraged passage of the reform measures.
“Under current law, insider trading is defined as the buying or selling of securities or commodities based on non-public information in violation of confidentiality – either to the issuing company or the source of information,” said Craig Holman, government affairs lobbyist with Public Citizen. “But the prohibition on insider trading doesn’t apply to members of Congress or their staffs. Apparently, some congressional officials and employees believe that they do not owe a duty of confidentiality to these companies and thus are not liable for insider trading. That is flat wrong and should be remedied.”
A new study and recent news reports suggest that some members and staffers may be taking advantage of this loophole in the law by trading on insider information gathered in congressional briefings or on knowledge of pending legislation for personal benefit.
The groups applauded the new momentum for passage of the STOCK Act and challenged every member to lend their support.
“We encourage all members to join in this bipartisan effort to apply the insider trading laws uniformly across Congress before any new scandals may arise. We urge you to join as co-sponsors,” the letter said.
The letters are available at: http://www.citizen.org/documents/insider-trading-letter-to-house.pdfand http://www.citizen.org/documents/insider-trading-letter-to-senate.pdf.