The STOCK Act Is Signed Into Law, But Insider Trading Will Live On
Today, President Obama signed the Stop Trading on Congressional Knowledge (STOCK) Act into law, which overwhelmingly passed both houses of Congress. The law takes aim at insider trading within Congress, which was exposed in a blockbuster 60 Minutes report late last year.
“The powerful shouldn’t get to create one set of rules for themselves and another set of rules to everybody else,” said Obama before signing the bill into law. “certainly should apply to our elected officials, especially at a time when there’s a deficit of trust” in Washington”:
One provision that was dropped was one that would’ve “required Washington insiders who sell intelligence to corporate America to register as lobbyists.” “The lobbyists get rich. Wall Street traders get rich. But the American people lose,” said Sen. Chuck Grassley (R-IA) after the provision failed to stay in the final bill.
Meanwhile, Sen. Sherrod Brown (D-OH) authored an amendment with Sen. Jeff Merkley (D-OR) that would’ve forced Members of Congress to divest stock holdings unless they are placed in a blind trust — a reform that would’ve effectively killed congressional insider trading once and for all. That amendment was defeated 26-73.
It’s true that the STOCK Act will implement some crucial reforms. For example, it places new transparency requirements for stock transactions among Members of Congress, requiring “that public reports of new transactions exceeding $1,000 be posted online either 30 days after the individual was notified of a transaction in his or her account, or 45 days after the transaction.” It but it ultimately does not include provisions that truly would eliminate ethically dubious insider trading by Washington officials.