STOCK Act passes Senate, Obama (Hopefully) to Sign

[Sallow]

Congratulations, STOCK Act. You'll Be a Law!

By Rich Smith | Motley Fool
March 23, 2012

t's official. On Thursday, March 22, 2012, the U.S. Senate passed by near unanimous vote a bill to Stop Trading On Congressional Knowledge. A bill that (in theory at least) will put an end to members trading stocks with the use of inside information, known to them from their work as representatives -- but unknown to most of the people they were elected to represent.

Six years in the making, the bill died three times in committee, got sidelined in the House in 2011, and was assaulted by a horde of mutant amendments in the Senate in early 2012. But it survived. After winning with landslide votes in both the Senate and House in February, the STOCK Act was adopted by a 96-3 vote in the Senate yesterday, and now heads to President Barack Obama's desk for signing.

The lowdown on the STOCK Act
What does the STOCK Act do? Basically, it boils down to three big things:

First and foremost, the act explicitly states that members have a duty to the United States and its citizens, and to the institution of Congress itself, to keep confidential any material information they come into possession of in the course of performing their duties. That sounds like a "well, duh!" statement to most of us, but legal scholars have been debating for years whether such a duty actually exists in law.

Now we know it does, because the law says it does. As a result, the entire history of SEC regulation of insider trading can now be applied in full to members of Congress.

Second, the act forbids public officials, including members of Congress, from using their government office to obtain preferential access to hot IPOs.

Third, to help voters ensure that Congress is doing what it's now legally obliged to do (and not do the things it's now legally forbidden from doing), the act requires members of Congress (and senior members of the executive branch) to disclose their trading activity within 30 days after placing a trade. That's different than the current disclosure requirement, which had trades and disclosures being separated by as much as 17 calendar months. Further improving the system currently in place, these disclosures will need to be made electronically, in standardized form, and will be open to the public for review.

This is both good news for the public and good news for traders/investors. It's missing some components that I would have liked to see pass through (more in the article), but with so little accomplished for the people these days and rampant partisanship, I'm glad to see this get done.

Now, hopefully Obama will sign it.

 

[nitroz]

Well, it's ONLY Illegal now? We shouldn't stop here. It sounds too good to be true, but we need proof that it works. We need to see congress members thrown in jail for their actions. They only passed this because of their approval ratings.

We need enforcement!
All the republicans were against this and had it watered down so there are loopholes and where they can't actually get in trouble. They will get rich one way or another. We need to find better ways to throw them in the slammer.

Oh, jeezus. I should known someone would turn this bill into partisanship. The bill got overwhelming support from both sides. Read the bill.

The bill was accepted by the Republicans because it was watered down.
They refused to pass it in it's earlier form.

So, since this is watered down, They are free to exploit it.
It sounds good in writing, but what are they going to do to enforce it? nada.

 

[Sallow]

Well, it's ONLY Illegal now? We shouldn't stop here. It sounds too good to be true, but we need proof that it works. We need to see congress members thrown in jail for their actions. They only passed this because of their approval ratings.

We need enforcement!
All the republicans were against this and had it watered down so there are loopholes and where they can't actually get in trouble. They will get rich one way or another. We need to find better ways to throw them in the slammer.

Oh, jeezus. I should known someone would turn this bill into partisanship. The bill got overwhelming support from both sides. Read the bill.

The bill was accepted by the Republicans because it was watered down.
They refused to pass it in it's earlier form.

So, since this is watered down, They are free to exploit it.
It sounds good in writing, but what are they going to do to enforce it? nada.

They have to disclose..that's pretty major. And while they aren't going to be tossed in the pokey for violations..they can be tossed out of congress.

That works.

 

[editec]

I also have to wonder about congress buying stock well in advance and then vote on policy that could allocate funds to a corporation or to a sector for that matter that would boost the price of stock for a corporaton or to a whole sector.
Al Gore talking up global warming made him a rich man with his sector investments.

Ah...I see that SOMEBODY has their THINKING CAP on, don't they?

Good for you, Meister.

Of course this law is a good thing, but one can certainly see how a truly determined corporation and their lapdog congress persons could evade the law by doing a little advanced planning.

And here's another way this INSIDER ADVANTAGE could easily work.

A law concerning one corporation is to be voted on.

If that law passes corporation A will be BUYING goods or services from corporation B, one that is not specifically mentioned in this bill, one that is not actually in the same industry, but one that will benefit GREATLY doing business with corporation A.

So, the Insiders buy into CORPORATION B, rather than corporation A, but they vote in favor of corporation A, and by doing so gain the benefits of CORPORATION B's sales to corporation A.

My point is that there are many mechancisms to get around this kind of bill.

That said, I think this is a GOOD START, but hardly the final solution to the corription of legislatures

 

[konradv]

1. Blind trusts for anyone privy to insider information, including Congressional staffers.

2. Public financing of elections to stop the legal bribery called "campaign donations".

 

[TakeAStepBack]

 

[konradv]

BORING!!! Crawl back into your empty refrigerator box and sleep it off.

 

[theunbubba]

Bill Text - 112th Congress (2011-2012) - THOMAS (Library of Congress)

Here is the actual bill.

The open reporting provision should be enough. The PEOPLE must hold their representatives accountable. None of this garbage from other posters about partisanship or enforcement matters. The people must watch our representatives or get what we deserve.

 

[forums]

Wealth is a matter of productive capacity and productivity, not pieces of shiny metal. By destroying the classical education the productive capacity and productivity of Christendom was severely reduced.

 

[Conservative]

Wealth is a matter of productive capacity and productivity, not pieces of shiny metal. By destroying the classical education the productive capacity and productivity of Christendom was severely reduced.

and that comment has what to do with the topic?

 

[Intense]

I also have to wonder about congress buying stock well in advance and then vote on policy that could allocate funds to a corporation or to a sector for that matter that would boost the price of stock for a corporaton or to a whole sector.
Al Gore talking up global warming made him a rich man with his sector investments.

Ah...I see that SOMEBODY has their THINKING CAP on, don't they?

Good for you, Meister.

Of course this law is a good thing, but one can certainly see how a truly determined corporation and their lapdog congress persons could evade the law by doing a little advanced planning.

And here's another way this INSIDER ADVANTAGE could easily work.

A law concerning one corporation is to be voted on.

If that law passes corporation A will be BUYING goods or services from corporation B, one that is not specifically mentioned in this bill, one that is not actually in the same industry, but one that will benefit GREATLY doing business with corporation A.

So, the Insiders buy into CORPORATION B, rather than corporation A, but they vote in favor of corporation A, and by doing so gain the benefits of CORPORATION B's sales to corporation A.

My point is that there are many mechancisms to get around this kind of bill.

That said, I think this is a GOOD START, but hardly the final solution to the corription of legislatures

Yep, and should that fail, the Federal Government could just resort to the tried and True, do nothing policy of refusing to investigate, and claim only they have the jurisdiction.