STOCK Act Passed by the Senate

Statement by the President

In my State of the Union Address, I laid out a blueprint for an economy built to last, where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules – especially those of us who have been sent here to serve the American people.

Last week, I called on Congress to pass a bill that makes clear that Members of Congress may not engage in insider trading.  No one should be able to trade stocks based on nonpublic information gleaned on Capitol Hill. So I’m pleased the Senate took bipartisan action to pass the STOCK Act. I urge the House of Representatives to pass this bill, and I will sign it right away. 

And while this is an important step to rebuild the trust between Washington and the American people, there is much more work to be done, like prohibiting elected officials from owning stocks in industries they impact, and prohibiting people who bundle campaign contributions for Congress from lobbying Congress, an idea that has bipartisan support outside of Washington.  These are straightforward proposals that will help eliminate the corrosive influence of money in politics.

Politics in Action: S. 2038

STATEMENT OF ADMINISTRATION POLICY

S. 2038 – Stop Trading on Congressional Knowledge (STOCK) Act of 2012

 (Sen. Lieberman, ID-Connecticut)

The Administration strongly supports Senate passage of S. 2038. This legislation makes it clear that Members of Congress may not engage in insider trading. It will help to limit the corrosive influence of money in politics and ensure that the Congress is playing by the same set of rules as everyone else, an important component of the President’s Blueprint for an America Built to Last. 

S. 2038 clarifies that Members and employees of Congress are subject to the prohibitions arising under Section 10(b) of the Securities Exchange Act of 1934 and the Securities and Exchange Commission’s Rule 10b-5, including the prohibition on insider trading. In particular, it makes clear that Members and employees of Congress owe a duty arising from their position of trust and confidence not to use nonpublic information obtained by virtue of their position for personal benefit.  It also requires reporting of various transactions, including purchases and sales of stock, within 30 days.

In addition, S. 2038 requires the Comptroller General, in consultation with the Congressional Research Service, to prepare a report for submission to the Congress on the role of political intelligence in the financial markets. This report would address, among other things, the effects of the sale of political intelligence on the financial markets, related legal and ethical considerations, and the merits of imposing disclosure requirements on those who engage in political intelligence activities. 

As the President said in his State of the Union message, it is critical that the Congress take steps to restore the American people’s trust in Washington.  Members of Congress should not be able to trade stocks based on nonpublic information gleaned on Capitol Hill. The Administration believes this bipartisan legislation is an important first step to prevent Members of Congress from profiting from their positions and calls for swift passage.

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