Congress votes to curb insider trading, require federal employee disclosure

Mary Altaffer/AP

The Senate approved a House-passed bill aimed at preventing insider trading by members of Congress and thousands of executive branch officials. The legislation now goes to President Obama for his signature.

Senators agreed to discard a more extensive version of the bill they passed last month in favor of the House measure. That meant dropping amendments including measures to require people engaged in “political intelligence activities” to register as lobbyists and to help prosecution of public corruption.

The STOCK Act seeks to clarify an ambiguity in the 1934 Securities and Exchange Act by prohibiting members of Congress and their staffs from trading on information they obtain from their work that is not available to the general public. It would require disclosure 30 days after any securities trade of more than $1,000 and would compel all disclosures to be available electronically.

But both the House and Senate versions included a provision to compel all disclosures to be available electronically. Confusion over how many federal employees would be required to disclose information emerged in February after an amendment from Sen. Richard Shelby, R-Ala., broadened the language to cover thousands more lower level federal employees. Under the 1978 Ethics in Government Act, high-level federal appointees must make their financial disclosures public, while a vaster universe of mid-level employees must disclose confidentially to their agency ethics officer.

The House version now headed to President Obama would cover only the smaller group of top officials, some 28,000, according to the Office of Government Ethics. Soon after it passed the House, Senior Executives Association President Carol A. Bonosaro and General Counsel William Bransford wrote a letter to Senate leaders saying the act’s “extensive, burdensome and public reporting requirements will have a chilling effect on those employees considering entering the SES.”

Passage of the bill on Thursday completes a process that senior lawmakers in both parties considered unnecessary as policy but an important public relations exercise in response to reports of lax restrictions on insider trading by members. Senate Majority Leader Harry Reid, D-Nev., said he moved the House measure because Republicans blocked a conference committee to reconcile differences between the chambers’ measures. But Reid chose to quietly move the House bill rather than force a fight, to the chagrin of some senators.

Sen. Chuck Grassley, R-Iowa., who sponsored the political intelligence amendment, said he voted against cloture on the bill to protest its exclusion. “The majority leader’s heavy-handed tactics leave few options for restoring the provision this go-round,” said Grassley, who pledged to try again.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

    View
  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

    View
  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

    View
  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

    View
  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

    View
  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

    View
  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.

    View

When you download a report, your information may be shared with the underwriters of that document.