Common Cause backs quick Senate action on STOCK Act

A Senate hearing today on legislation to block insider stock trading by members of Congress and their staffs gives lawmakers what should be a welcome opportunity to work together on behalf of a simple and constructive reform.

“Members of Congress and their staffs should not be permitted to profit from their access to business information that is unavailable to other investors and the general public,” said Common Cause President Bob Edgar. “Common Cause urges quick action on the Stop Trading on Congressional Knowledge (STOCK) Act.”

Introduced by Sens. Kirsten Gillibrand, (D-NY), and Scott Brown, (R-MA), the STOCK Act is intended to make clear that Congress is subject to the same laws that restrict insider trading by business executives and employees. The legislation is scheduled for a markup session today in the Senate Committee on Homeland Security and Government Affairs.

Current law defines “insider trading” as the buying or selling of securities or commodities based on non-public information in violation of confidentiality – either to the issuing company or the source of the information. Because Congressional officials and employees sometimes obtain such information as part of their official duties, it is often argued that they are not required to keep it confidential and thus are not liable for insider trading.

Support for the legislation picked up steam in recent weeks after the CBS news program “60 Minutes” aired a report detailing stock trades by prominent members of Congress including House Speaker John Boehner and Democratic leader Nancy Pelosi. Both denied any wrongdoing.

A letter sent to senators today by Common Cause, the Campaign Legal Center, Democracy 21, Public Citizen, the Sunlight Foundation and US PIRG argues that the proposed bill would “provide a clear and balanced application of the laws” and should be passed “before any new scandals may arise.”