The Senate on Thursday voted 96 to 3 to pass legislation that prohibits member of Congress, their staff and all federal employees from using non-public information to trade stocks.
"With passage of the STOCK Act, members of Congress and their staffs can no longer use inside government information to make money in the stock market," Sen. Scott Brown (R-MA), who proposed the bill, said. "Insider trading is wrong, whether it happens on Wall Street or on Capitol Hill. The passage of this legislation is an important step toward restoring trust in our government."
But the legislation did not include amendments that would close loopholes in the nation’s anti-corruption laws and require political intelligence agents to register as lobbyists.
Those amendments were included in the previous Senate version of the bill, but excluded from the House version.
"The Senate passed both of these amendments with strong, bipartisan support,” Leahy and Grassley said in a letter to Senate Majority Leader Harry Reid (D-NV) and Senate Minority Leader Mitch McConnell (R-KY).
“Unfortunately, the House stripped both provisions from the STOCK Act without a vote. The Senate should act to ensure that the key improvements it made to this bill are incorporated into the final legislation that Congress passes."
However, Reid and McConnell agreed to put the House version up to a vote in the Senate, rather than convene a conference committee or allow additional amendments.
Insider trading was already illegal, but there were concerns that loopholes in the law meant that members of Congress and their staff could not be held accountable for trading on non-public information they learn through their work in Congress.
The STOCK Act corrects the ambiguity in existing laws by empowering the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to ensure that members of Congress and their staff can be held accountable for insider trading.
The bill now heads to President Barack Obama, who endorsed the STOCK Act during his latest State of the Union address.