Federal legislation to ban insider trading by members of Congress passed in the U.S. House of Representatives on Thursday morning.
The STOCK (Stop Trading on Congressional Knowledge) Act was cosponsored by U.S. Rep. Jaime Herrera Beutler, R-Camas. Following the 417-2 vote on Thursday, Herrera Beutler said in a news release that she was proud to vote yes on the legislation.
“Just five months ago, folks were skeptical that the STOCK Act would ever see the light of day,” she said. “Hardworking taxpayers deserve to know that their federal representatives live under the same laws that they do, and that the public good will always come before personal gain.”
The STOCK Act passed in the U.S. Senate last week. The Senate and House bills differ slightly, and the two chambers will need to come to an agreement on the legislation.
Herrera Beutler’s predecessor, former U.S. Rep. Brian Baird, cosponsored a version of the legislation in 2006. The current version of the STOCK Act was introduced March 17 of this year by Rep. Timothy Walz, D-Minn., referred to a series of House committees, and reintroduced June 1.
Under the bill, members of Congress and congressional and executive staff members would be prohibited from buying or selling securities, swaps or commodity futures based on nonpublic information they obtain through their jobs; prohibited from sharing nonpublic information about legislative actions for purposes of investing or profiting from investments; and be required to report within 45 days any investment transactions valued in excess of $1,000.
The bill also would prevent members of Congress who have been convicted of a crime from receiving taxpayer funded pensions.
The legislation was prompted in part by the insider trading scandal involving former House Majority Leader Tom Delay and lobbyist Jack Abramoff in 1999 and 2000.
In researching the issue at the time, Baird learned that political intelligence firms marketing insider knowledge had operated in the nation’s capital since the 1970s but remained relatively unknown because they were not required to register their clients or report their earnings.