Today, the U.S. House of Representatives passed a bill, the STOCK (Stop Trading on Congressional Knowledge) Act, to curb Congressional insider trading. Vote results indicate 417 Congress members in favor of the bill and two in opposition. This House version differs from that of the Senate, which includes provisions for financial data collectors to disclose their activities like lobbyists. Regarding the differences between both bills, critics claim the House version has “caved in to investment firms” with its exclusion of said provisions.
A political intelligence industry exists to monitor and sell data based on the financial activity of government officials. House Representatives have expressed concern that this “watered-down” version of the bill does not regulate the communication or financial exchanges between these industry members and government officials. Wall Street lobbyists have been accused of leading the “watering.” Nevertheless, both House Democrats and Republicans overwhelmingly support the bill, including the President’s stated endorsement.
The creation of the STOCK Act may have been the result of the CBS “60 Minutes” investigation that implicated that lawmakers enriched themselves based on information obtained through their official duties. Even without the bill being passed, members of Congress are by no means above the law when it comes to insider trading. Members of Congress face the same penalties as regular investors who attempt insider trading. For the last seven years, there have been no recent insider trading charges brought to Congressional delegates.
What do you think?
• Are you in favor of the legislation banning insider trading?
• If so, what should the penalty be for insider trading?
• If not, do you think government officials’ investments should be kept entirely private?
• If the investments of Congress members become free public information, how can an industry that sells this data exist? Does this imply a relationship of “shadiness” between these data miners and government officials?