The House of Representatives passed the Stock Act 417-2 on Thursday after a six year battle to try to pass a bill such as this. The Stock Act essentially makes it illegal for members of Congress to use insider trading to trade stocks. This Republican version of the bill stripped the Senate provision of making “political intelligence” lobbyists report on what their trades are based on what stocks they bought, believing the stock will benefit from Congressional laws.
Instead the Republicans added their own provision that essentially said that the Stock Act applies to the Executive Branch as well. That means that the president, vice president, cabinet members, and over 30,000 other employees will not be allowed to trade stocks based on non-public information. President Obama has already signaled support for the Republicans’ provision and said he would sign the bill into law.
Now the bill must go back to the Senate to be reviewed and voted on. A special committee must consolidate the Senate and House forms of the bill. However, there is speculation that the Senate will pass the House version instead despite the fact that Senate Democrats said that they wanted the final legislation to be closer towards the original Senate bill.
This unusual Congressional cooperation has come after the public became aware that their representative have been using insider information to get into stocks before they react, making big profits. Insider trading, of course, is illegal for the public to engage in, making the US public very angry that their representatives are getting special treatments above the law, yet they can’t even agree on simple issues.
The bill also contains a “Pelosi provision” that says members of Congress do not have early access to IPOs. The provision is called the “Pelosi provision” after her husband was able to get into the Visa IPO of 2008, one of the largest in history.
It is unacceptable that it took Congress six years to pass this bill and they only passed it this time because their constituents were sending them letters, protesting and letting their representatives know that this is unacceptable. This current session of Congress is considered one of the worst when you look at approval ratings. They displayed their abilities back in August when a US debt default was on the line and no side was willing to compromise. They were willing to have the United States default on its debt obligations rather than compromising and looking “weak” to the other side. However, that is beside the point. Hopefully in the week or so we can finally hold our government leaders accountable for insider trading.