Following the revelations of congressional insider trading – where members of Congress were basically profiting off of investments related to their votes and legislative knowledge – captured in a 60 Minutes report, a number of lawmakers are now trying to pass the Stop Trading on Congressional Knowledge (STOCK) Act to effectively ban this practice.
Here are a few facts about what the STOCK Act does — and doesn’t — do:
1. It Restricts Insider Trading On “Nonpublic Information”: Members of Congress are privy to what is called “nonpublic information” — meaning information they are privy to thanks to their roles as federal lawmakers. The STOCK Act prohibits lawmakers and congressional employees from making investments based on this information. The bill also applies to employees of the executive branch.
2. It Prohibits The Sharing Of “Nonpublic Information”: “Political Intelligence” firms specialize on obtaining “nonpublic information” from sources in the government. Under the STOCK Act, members and employees of Congress cannot share any of this information about pending or prospective legislation for the purpose of making investments.
3. It Does Not Ban Investment In Industries Members Are Legislating On: Senator Sherrod Brown (D-OH) is working on an amendment that would require “ all Senators to divest themselves of any stocks in companies that are impacted by their actions as a Senator,” a prohibition that is not included in the STOCK Act.
The STOCK Act is expected to come up for a vote in the Senate this week.