I thought the 60 Minutes piece on insider trading by members of Congress had quite a few holes in it, but it did call attention to the indefensible fact that members of Congress have no restrictions on insider trading. The conceit is that all hearings, votes, etc. in Congress are a matter of public record, so they have no “inside” information. I’ll pause while you stop laughing.
There is active legislation in the House to deal with this, known as the STOCK Act. But it has been introduced in several different sessions without gaining traction, and this year, prior to the 60 Minutes story, it only gained 5 co-sponsors. But after the story, lots of members of Congress want to show their attention to the issue. Senators Kirsten Gillibrand, Jon Tester and Debbie Stabenow will introduce the STOCK Act in the Senate; it was only a House bill before now. The bill would ban insider trading among members of Congress or their staff, and empower the SEC and CFTC to go after it (as we’ve seen recently, insider trading is one of the few laws that the SEC will bother to prosecute). It would also increase reporting requirements on any transaction over $1,000, and would require that “political intelligence consultants” – yes, there is such a name for people who contact members of the legislative or executive branch looking for market information – register as lobbyists and report their financial dealings.
Massachusetts Senator Scott Brown, now quickly becoming a Democrat-lite in response to Elizabeth Warren’s challenge, plans to introduce the STOCK Act as well. I imagine he will sign on to the Gillibrand/Tester/Stabenow legislation. Darrell Issa has made noises toward imposing rules for Congress against insider trading as well. Heck, even Republican front-runner (!) Newt Gingrich understands the political winds enough to decry Congressional insider trading.
More from CNN. One thing I will say about this is that it shows how traditional media still has some power if they use their investigative chops. Of course, in 60 Minutes’ case this has been done to promote the work of a conservative activist from the Hoover Foundation. I eagerly await them picking up a story from Amy Goodman.
In addition, let’s wait for the follow-through. The most difficult legislation Congress can pass is legislation that impacts their own bottom line.