Senate Passes Weakened Version Of Bill To Prevent Lawmakers From Insider Trading

It’s been a few months since we last heard much about the STOCK Act, the legislation intended to close the loophole that has allowed lawmakers (and their aides) to profit from insider trading. Well, it’s finally worked its way through the Senate, but not without losing a few teeth.

The bill requires lawmakers to disclose the purchase or sale of stocks, bonds, commodities futures and other securities within 45 days of transactions. They must also disclose the terms on their home mortgages.

However, the version of the bill that will now go to the White House no longer includes any regulation of firms that trade in “political intelligence,” information about government activities that is of potentially profitable interest to Wall Street investors.

Senator Charles Grassley of Iowa called the removal of this provision, “a victory for Wall Street and a defeat for the American people — a victory for the hedge funds and big banks that like the secrecy of the status quo.”

Insider Trading Ban for Lawmakers Clears Congress [NY Times]

Thanks to Random Talker for the tip!

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  1. Blueskylaw says:

    So there was wrangling over whether to make something that is already illegal for the unwashed masses, to also make it illegal for politicians and lawmakers?

    • Stickdude says:

      If you had any idea how many laws Congress exempts itself from, you’d realize that this really is a big deal.

      • Blueskylaw says:

        Makes you wonder why there is so much discontent in this country and why other nations view our leaders as corrupt as the ones that run dictatorships.

      • StarKillerX says:

        Yep, one of the first things Congress normally does when writing a law is exempt themselves from it.

        Ironically the same Congress that say that the administrative branch can’t be allowed to police itself then turns around and claims that no one can police Congress but Congress itself…… and we’ve all seen how well that works.

    • Cosmo_Kramer says:

      With regard to insider trading, everything that was illegal for the “unwashed masses” was already illegal for congress. The issue was that members of congress have access to information that was not covered by existing insider trading laws.

      Congress was not “exempt” from insider trading laws.

  2. krantcents says:

    Aren’t these the same people who can vote themselves a raise?…Why should we expect them to do the right thing? I don’t!

  3. StarKillerX says:

    Of course the Senator says it’s a victory for Wall St, when it fact it’s a victory for the pocketbook of politicians.

    • crispyduck13 says:

      Um, he’s saying that because they specifically removed a provision to regulate trading firms. That is Wall Street.

  4. Rexy on a rampage says:

    I’d like to imagine there could be a fair and non-corrupt U.S. government in my lifetime, but that requires

    A) Educated voters (and this is largely the cause of the corruption today),
    B) Fair policies for all (which requires the parties to work together, something that will never happen), and
    C) Bribe-exempt government.

    I’ll only see that in my dreams, and the article proves it.

  5. oldwiz65 says:

    They are just greedy like always; they never have enough money from their salaries, so they resort to insider trading, bribes, illegal gifts, and naturally votes in favor of whoever gives them gifts.

  6. Finsternis says:

    So the biggest crooks got themselves removed from this, and the rest will easily find loopholes and other slimy ways around this (maybe you can’t make any money, but who will know if you tell Cousin Fred?). Big deal.

    “Our leaders are like the drug lords who ruled American’s ghettos in the crack age, men interested in just two things: staying in power, and hoovering up enough of what’s left of the cash on their blocks to drive around in an Escalade or a 633i for however long they have left. Our leaders know we’re turning into a giant ghetto and they are taking every last hubcap they can get their hands on before the rest of us wake up and realize what’s happened.”

    - Matt Taibbi, “Griftopia”

  7. vliam says:

    So, they removed the only provision of the “Stop Trading on Congressional Knowledge” reform bill that actually attempted to Stop Trading on Congressional Knowledge?

    That was almost as big a circle-jerk as the ‘steroids in baseball’ hearings.

  8. Gorbachev says:

    So basically insider trading is still allowed, but they now have to be honest about it?

    /facepalm

  9. Cicadymn says:

    Of course it was weakened. Not doing so might be equal to a pay cut for them and they can’t have that.

  10. custommadescare says:

    Right…and it took the entire internet population to effectively strike down SOPA (for now, at least), while these a-holes in office can “sort of” abide the law that was written.

    sickens me, to say the least…

  11. fsnuffer says:

    So they have 45 days to disclose what they did. Most of the good research I use in my daily trading is at least 45 days old

  12. SPOON - now with Forkin attitude says:

    The president thanks you for this political grandstand that cost no one anything and pays dividends to all.

  13. SPOON - now with Forkin attitude says:

    Now the real battle begins at the moment the bill becomes law – it makes for the use of superfast trade computers so that the instant trading becomes legal the people who know get to trade.

  14. Green Beer Day says:

    C’mon, folks. It’s a floor not a ceiling. Future legislation can strengthen this when it’s a law. Support a stronger bill instead of being defeatist that it’s not strong enough.