The STOCK Act, a bill that is designed to restrict the ability of elected officials to make securities trades based on non-public inside information, is gaining support in Congress.
The STOCK Act which stands for “Stop Trading on Congressional Knowledge” was originally authored by Rep. Louise Slaughter, a Democrat from New York. Under Rep. Slaughter’s version of the Stock Act, public officials and their employees would be prohibited from trading based on private information obtained through the legislative process and Members of Congress and their employees would have to report their personal securities transactions on a quarterly basis.
In a letter to Congressman Spencer Bachus, the U.S. House of Representatives Chairman for the Committee of Financial Services, Representative Barney Frank urged the Chairman to act on the legislation. While Rep. Frank stated that in his view the problem was not widespread he still felt that the bill was important because of “the importance of those whom [they] represent being fully assured that [they] are behaving appropriately.” After receiving this letter, Chairman Bachus agreed to host a hearing on the issue. Opponents of the bill say that it is unnecessary because elected officials and their staff are subject to the same insider trading laws as the rest of the population.
Stay tuned to RIA Compliance Consultants for further updates as we will continue to follow this story.