STOCK Act Passes: House Votes For Weakened Insider Trading Bill

WASHINGTON -- A weakened version of the STOCK Act banning insider trading by members of Congress and the administration passed the House Thursday without curbs on "political intelligence" or new clean-government rules.

The legislation would make it clear that lawmakers and key staffers are bound by the insider trading laws that affect everyone. The House bill also adds a provision to bar lawmakers from participating in IPOs. The bill passed 417 to 2.

But the House bill cut a provision that was in the Senate version requiring people who collect and trade so-called political intelligence -- information from government that can move markets and stock prices -- to register just like lobbyists if they want to talk with covered officials in Congress and the executive branch so that the public knows who they are and what they're doing.

It also cut a provision that cracks down on officials guilty of taking actions on the job to benefit themselves.

Republican sponsors of those provisions in the Senate -- especially Sen. Chuck Grassley (R-Iowa) -- were highly critical of the changes, with Grassley calling them "astonishing and extremely disappointing."

House Majority Leader Eric Cantor (R-Va.) defended the revisions, saying his work on the legislation -- which was done in secret and ignored another version of the House bill that had nearly 300 co-sponsors -- strengthened the measure. He singled out the political intelligence provision.

"I think that is a provision that raises an awful lot of questions. I think there's a lot of discussion and debate about who and what would qualify and fall under the suggested language that came from the Senate," Cantor said, adding that political intelligence doesn't directly concern lawmakers since they are not the ones trading in the intelligence. "The political intelligence piece is outside of this body, and we're talking about us and the perception that has gathered around our conduct."

"It's incumbent upon each of us to start to restore the trust between the people and their elected representatives," Cantor asserted. "That is what the STOCK Act is all about."

But House Democrats, pointing to bipartisan disappointment in the Senate, took Cantor to task, even as they backed the bill in order to move it forward to a conference conference with the Senate, in which the differences could be worked out.

"It just raises a question to me as to if it is so important, and it certainly is, why we could not have worked in a more bipartisan fashion either to accept the Senate bill ... or to take up [the existing House bill]," said House Minority Leader Nancy Pelosi (D-Calif.).

"Instead, secretly, the Republicans brought a much-diminished bill to the floor," Pelosi said. She added, "Senator Grassley's remarks are stunning, and a stunning indictment of the House Republicans."

If any version of the STOCK Act is to pass, House and Senate leaders must now appoint a conference committee; they are expected to do so.

The article has been updated to reflect the final vote tally.

Michael McAuliff covers politics and Congress for The Huffington Post. Talk to him on Facebook.

Comments

[damonts]

01:15 PM on 02/17/2012

So i dont understand how this was legal in the first place...was there a provision in the insider trading laws already that exempted members of congress? was there a separate act making it legal for members of congress? i dont understand how these people shouldnt be charged and prosecuted already. It begs the question - what other laws are members of congress exempt from??

[Omer Feyzolu]

11:25 PM on 02/16/2012

Interesting and valuable comments I wish the congressmen had a wide research amonst the commenters before they pass any bill.
http://www.decktropic.com

[MrDanger]

05:33 PM on 02/16/2012

How about this for a law:

All laws that apply to citizens of the Unites States of America also apply to the Congress and the President of the United States of America."

No committees necessary just vote yes or resign immediately.

[Ryan Seth]

02:55 PM on 02/16/2012

Shocking, that the only means of ensuring our elected officials and their constituents behave ethically is to legislate thier behavior. It would be far more effective to a brave congressman or woman to step forward and disclose their transaction history. The public could the determine whether a correlation between their official and financial activities exists. Yet this alternative, while popular, is far less appealing. Creating committees to investigate these matters is a waste of congress's time and our money. Instead, the focus should be on creating a standard of ethical behavior by praising members of congress who embrace transparency and shaming those who do not.

This bill is an excellent example of well intended but terribly invasive legislation. It says, "don't do this because I'll be watching". We should send the message, "Do not do this because it is wrong."

Lastly, bills like this will pass because they must. It would not be politically expedient to vote against them. However, it is naive to imagine that the result will be anything but a hollow shell of its original intent. A bipartisan effort will will pass the bill wile simultaneously removing its teeth.

[Sampy Miller]

07:37 AM on 02/13/2012

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[MOCMOC]

05:21 PM on 02/11/2012

The version that passed in the House is substantially weaker than the version that passed in the Senate. House Majority Leader Eric Cantor (R-Va.) did his campaign funders on Wall Street a huge favor by including a loophole for lobbyists and hedge fund managers who trade on congressional insider information.
I encourage you to do more than just vent on this page. Go to Eric Cantor's website contact page and tell him what you think about his corruption. Or go to action.citizen.org and sign their petition about it. DO SOMETHING! This is outrageous!

[Terri Skau]

04:49 PM on 02/11/2012

Friend --

Right now, members of Congress can make personal investment decisions based on confidential information they get in the course of regulating industries and doing their work.

It's kind of unbelievable that this isn't already illegal. President Obama wants to make it illegal once and for all -- no one should profit from inside information about the very businesses they're supposed to be regulating.

Today, the Democratic leadership in the Senate voted to move forward on a bill to extend to Congress the same strict rules that apply to anyone else whose job gives them access to sensitive information about businesses. This legislation is expected to pass the Senate with bipartisan support later this week.

But Republicans in the House have yet to move on it.

There aren't a lot of good reasons to disagree with this bill. So the question here isn't how many people we have to persuade, but simply how loudly we can speak up to prevent the House Republicans from dodging this issue.

Say you support the President on banning insider trading in Congress:

Thanks, and stay tuned,

James

James Kvaal
National Policy Director
Obama for America

[Kali Yuga]

01:54 PM on 02/11/2012

Two social contracts, one for the 1% privileged caste and one for the peasants? We're the amerindian­s in this game, Tonto.

[BuddyMaine]

09:09 PM on 02/10/2012

"It's incumbent upon each of us to start to restore the trust between the people and their elected representatives, Cantor asserted. THEN WHY DID HE TAKE OUT the provision requiring people who collect and trade so-called political intelligence -- information from government that can move markets and stock prices -- to register just like lobbyists if they want to talk with covered officials in Congress and the executive branch so that the public knows who they are and what they're doing; and a a provision that cracks down on officials guilty of taking actions on the job to benefit themselves. SOMETHING FISHY HERE!

[Nora M]

06:12 PM on 02/11/2012

He took out the part about political intelligence (isn't that an oxymoron?) because he is in the game.

[Goldie DeBloomers]

02:57 PM on 02/10/2012

Remember Martha?

[Nora M]

06:14 PM on 02/11/2012

She went to prison because she was a woman. Men are excused. No matter what they do. Madoff was the exception, but he is Jewish.

[etherialecho]

12:45 PM on 02/10/2012

Congress Modus Operandum:

Good idea > Congress > (Disguised) bad legislation

[bordway]

11:36 AM on 02/10/2012

“It’s astonishing and extremely disappointing that the House would fulfill Wall Street’s wishes by killing this provision,” Grassley said in a statement. “If Congress delays action, the political intelligence industry will stay in the shadows, just the way Wall Street likes it.”

Chuck, this may be the only time we ever agree, but in this case we do. Cantor likes dealing political intelligence, because that's where the real money and perks are.

[bordway]

11:27 AM on 02/10/2012

"It also cut a provision that cracks down on officials guilty of taking actions on the job to benefit themselves."

So elected officials could sit in the office, day trade all day and that would be okay?

"people who collect and trade so-called political intelligence -- information from government that can move markets and stock prices" should not be allowed to communicate with elected officials in any fashion - ever.

[GoGrammie]

11:22 AM on 02/10/2012

This is nothing more than the inmates running the jail. It is not right that the congress gets to make up the rules about stock trading themselves. They should not engage in trading stocks period while they are in office. Thats it. They can trade all they want when they no longer work in congress but not while they have all the information they need to make a killing. It's not fair, it's not right and congress shouldn't get to "water down" the rules to suit them.

[Rexter]

10:19 AM on 02/10/2012

Cantor's revisions gutted a good bill. With his version the legislators can just use a straw buyer and it's kept off the radar. Cantor is pro-corruption.