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The Senate approved a bill on Thursday aimed at preventing lawmakers from trading on information to which they are privy because of their positions as lawmakers.
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The Stop Trading on Congressional Knowledge (STOCK) Act would require members of Congress, as well as more than 300,000 other federal employees from secretaries to drivers, to file electronic disclosures of their stock trades within 30 days of the transactions.
The Democrat-led Senate passed the bill in a 96-3 vote on strong bipartisan support. However, they passed more than simply an insider-trading bill, as the measure, which seemed bound for quick passage, was quickly laden with more than 20 amendments this week before yesterday’s vote.
Senators sought to attach proposals ranging from a ban on executive bonuses at Fannie Mae and Freddie Mac to a limit on terms for members of Congress.
The Republican-led House of Representatives is considering similar legislation, and Majority Leader Eric Cantor (R-Va.) has said he plans to bring it to a vote this month.
Lawmakers are seizing the disclosure bill at a time when voters are growing increasingly hostile toward Congress. Opinion polls in recent months have shown the public’s approval ratings for Congress to be hovering around 10 percent.
The debt debacle last summer demonstrated how lawmakers have allowed party politics to hinder their ability to make important decisions for the economy. Then in November, a CBS broadcast of “60 Minutes” exposed members of Congress for trading on inside information they received because of their positions, drawing national attention to the issue.
“We need to reassure a skeptical public that we understand elective office is a place for public service, not for private gain,” said Senator Susan Collins (R-Maine).
In his State of the Union address last week, Obama urged Congress for swift passage of an insider trading bill. In a statement after Thursday’s vote, Obama said he was “pleased the Senate took bipartisan action to pass the STOCK Act,” calling it an important step to rebuild the public’s trust.
“I urge the House of Representatives to pass this bill, and I will sign it right away,” Obama said.
The Senate bill included an amendment that would impose the same stock trading disclosure requirements on Executive Branch employees and independent government regulatory agencies as well.
Though many Executive Branch employees are already subject to stringent financial disclosure rules, Senator Richard Shelby (R-Ala.) was keen to put the administration under the same scrutiny as Congress.
“It only seems fair that executive branch officials who are already required to file annual financial reports also be directed to meet the same additional reporting requirements being imposed on the Legislative Branch,” said Shelby.
Senators rejected a proposal that would have required lawmakers to sell shares in companies that could benefit from votes they might make — a rule that many Executive Branch officials already must abide to avoid the risk of a conflict of interest.
A ban on bonuses at Fannie and Freddie was also approved on a voice vote, as was a measure requiring professionals who gather “political intelligence” and sell it to hedge funds and other investors for profit to be registered like lobbyists.
The bill also gives the Securities and Exchange Commission the authority to monitor and, if need be, take action against members of Congress who trade on non-public information.
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