Obama signs STOCK Act requiring financial disclosure by federal employees

Carolyn Kaster/AP

In one of Washington’s rare bipartisan bill-signing ceremonies, President Obama on Wednesday enacted the STOCK Act, a set of new financial disclosure requirements designed to prevent insider trading based on information gathered in the course of work by members of Congress and top executive branch officials.

At a ceremony in a White House auditorium attended by some dozen lawmakers and Vice President Joe Biden, Obama hailed the new law as one step toward closing “the deficit of trust between this city and the rest of the country.” He added, “The notion that everybody plays by the same set of rules is one of our most cherished values.” He did not mention the impact on federal employees.

Though lawmakers as varied as Sen. Scott Brown, R-Mass., and Rep. John Larson, D-Conn., attended the event, Obama noted that the bill’s chief champion Rep. Louise Slaughter, D-N.Y., was absent due to a broken leg.

Also absent was House Majority Leader Eric Cantor, R-Va., who played a key role in the bill’s final passage. His staff said he was invited but had district events to attend. Cantor posted a statement on his website saying, “The STOCK Act demonstrates that we can come together and deliver results for the American people, and we should build on this momentum going forward.”

The Stop Trading on Congressional Knowledge 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. The law requires disclosure 30 days after any securities trade of more than $1,000 and compels all disclosures to be available electronically.

Aimed primarily at Congress and supported by many ethics watchdog groups, the act gathered momentum last year after a 60 Minutes expose on the trading profits made by some high-level lawmakers at a time when Congress’s public approval rates are stunningly low. The idea of broadening the legislation to cover some 28,000 federal employees occurred late in the legislative process.

Senior Executives Association President Carol A. Bonosaro told Government Executive she was “disappointed” and wished Obama had vetoed the bill, “but it’s understandable given the nature of the act and its application to Congress. It was an impossible situation.”

SEA’s concerns are twofold, Bonosaro said. First there is a burden on agency ethics office, on the Office of Government Ethics and on career executives, she said. Second, “there is potential for privacy to be invaded” by making more financial information available on a public website that might become a “prime phishing site for identify theft,” she said.

The association plans to pay attention to how the Office of Government Ethics writes the regulations, hoping to encourage as much privacy protection as possible, Bonosaro said.

The Office of Government Ethics posted a statement saying it “fully supports the act’s focus on improving transparency and promoting public confidence in government and is carefully analyzing the provisions of the new law. In consultation with [designated agency ethics officials] and other senior agency ethics officials, OGE will issue a series of legal, program and education advisories to implement the act’s provisions.”

A positive view of including federal employees was offered by the nonprofit OMBWatch, whose federal information policy analyst Gavin Baker attended the ceremony. OMBWatch’s analysis said the act will bring disclosures “under a common legal standard and significantly expand the number of officials whose reports are available online.”

As of March, the group noted, the Office of Government Ethics had posted financial information on only 900 federal executives. Under the new law, thousands more will be required to post by August 2012, and agencies must present them in a searchable database by September 2013. Some 350,000 employees who currently file financial information privately to agency ethics officers will now be required to do so electronically.

Such work previously was left to nonprofit activist groups such as the Center for Responsive Politics' OpenSecrets.org and Judicial Watch's Judicial Financial Disclosure Project, according to the analysis.

“In addition, the bill enhances the content of financial disclosure reports by requiring timelier reporting of transactions and requiring a subset of top officials to report mortgages on personal residences,” OMBWatch said.

Many state governments already provide some online access to similar disclosures by officials; others, including Maryland, are considering following suit.

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

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

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.


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