Snap Fact #156

Post date: Apr 10, 2012 12:3:32 AM

Snap Fact #156

President Obama Signs The Stock Act To Bring Financial Accountability And Ethics To Our Elected Leaders! 

In his 2012 State of the Union Message, President Obama called for a law preventing insider trading by members of Congress. "Send me a bill that bans insider trading by members of Congress; I will sign it tomorrow," The President said during his address. After some delay and watering down of the Bill by the House, the cleverly named Stop Trading On Congressional Knowledge (STOCK) Act was passed on April 3rd, 2012 and a short signing ceremony was held at noon the next day.

This act makes it illegal for legislators, members of the executive branch, and federal employees or anyone connected to them, including their families and their staffs, to profit from trading securities based on privileged information that is available to them but not to the public. 

The President complemented the members who worked to turn this idea into the reality of this bi-partisan Bill. While praising the bill, the President made it clear that the Bill had been watered down by the House after passing the Senate in full force. 

The President noted that there is more to do in this effort but he seemed pleased at this meaningful start in the direction of personal accountability for government employees.

After the State of the Union, legislation that was already in process but stuck on a shelf started to move swiftly through the legislative process. The President's clarion call inspired Harry Reed to promise to move it to a vote in the Senate which he did in March yielding an unusual 96-3 tally in favor. The House acted even faster as they passed their weaker version back in February by a stunning 417-2 vote. Since then the final Bill was hashed out by a joint committee.

The STOCK Act was authored by Sens. Kirsten Gillibrand (D-N.Y.) and Scott Brown (R-Mass.). Browns version was the watered down version that allows legislators to do favors for companies whose stock they own as long as they don't sell the stock they can benefit from it's appreciation due to decisions they help render. Gillibrand's version did not have this out. 

The Bill was originally proposed by N.Y. Representative Louise Slaughter in 2006 and has languished all these years. After her tireless promotion of the concept, Slaughter ironically, was not able to attend the signing ceremony because she broke her leg the day before.