A bicameral congressional bill was introduced on Feb. 9 to ban elected officials from trading individual stocks and strengthen disclosure rules to prevent insider trading.
Called the Stop Trading on Congressional Knowledge (STOCK) Act 2.0, the bill was brought forward by California Rep. Katie Porter, a Democrat, and New York Sen. Kirsten Gillibrand, a Democrat, who authored the original STOCK Act, which was passed in 2012.
The STOCK Act 2.0 would specifically ban various elected officials from trading individual stocks, with civil penalties of 10 percent of the investment value if an individual violates the ban.
“Few Americans trust that our government is working for them, and that’s a real problem for our democracy," Porter said in a statement. “By strengthening disclosure requirements and banning top officials from trading stocks, we can help restore faith in our government. The American people deserve to have confidence that those in power are working in the public’s interest, not in their own self-interests.”
The ban would apply to the president, vice president, supreme court justices, Federal Reserve Board governors, Federal Reserve Bank presidents and vice presidents, and members of Congress.
The original STOCK Act banned insider trading—or using nonpublic information to make stock trades—for individuals in the same positions of power and included financial transparency updates by requiring government officials to disclose financial transactions to the public.
The STOCK Act 2.0 builds on those same rules by requiring officials to report, within 30 days, anytime they, a spouse, or a dependent applies for or receives a “benefit of value” from the federal government, such as a loan, agreement, contract, grant, or payment.
Penalties for failure to file STOCK Act transaction reports would be increased from $200 to $500.
“The American people need to know that their elected leaders are putting their constituents’ interests—not their own financial interests—first. That is the job we were sent to Washington to do,” Gillibrand said in a statement.
“I’m proud to ... help end these abuses and give Americans confidence that Congress is acting solely in the national interest.”
Supervising ethics agencies created under the original STOCK Act will also now be required to provide public access to personal financial disclosure reports and STOCK Act transaction reports to ensure they are “searchable, downloadable, and easily accessible.”
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