CQ TODAY ONLINE NEWS
Jan. 30, 2012 – 10:51 p.m.
Senate Starts Potentially Lengthy Insider-Trading Debate
By Rachael Bade and Alan K. Ota, CQ Staff
In announcing that the Senate will debate an insider-trading bill without limits to amendments, Majority Leader
The Senate on Monday agreed, 93-2, to take up the bill, which would strengthen laws banning lawmakers and aides from trading stocks based on inside information.
The vote Monday occurred less than a week after President Obama asked in his State of the Union speech that lawmakers “send me a bill that bans insider trading by members.” In a statement of administration support for the proposal, the White House said the measure (
The bill would clarify that current Securities and Exchange Commission (SEC) prohibitions on insider trading on non-public information extend to lawmakers and staff members. It would reinforce the rules with new congressional disclosure requirements.
The Senate is expected to debate the measure in the coming days, but getting to a vote on passage may take days or even weeks. Reid’s decision to allow an open amendment process for the bill’s consideration means any member can offer extraneous amendments.
“It is my wish that Republicans will not abuse the comity that should be here in the Senate,” Reid said. “I would hope that these amendments that are offered would not be non-germane, non-relevant.”
Unless Reid and Minority Leader
Reid also filed a substitute amendment to the bill on Monday that acknowledges the bill is largely symbolic, saying it does not create any new prohibitions.
Instead, the bill clarifies that members of Congress and their aides are covered by current SEC regulations that bar the use of non-public information for trading stocks and bonds, and it states that existing House and Senate ethics rules bar lawmakers from voting on legislation on which they have a conflict of interest.
The bill would direct the Senate and House ethics committees to issue “interpretive guidance” to underscore that lawmakers cannot use non-public information for “private profit.”
The Reid amendment also would direct the Office of Government Ethics, which monitors executive branch employees, and the Judicial Conference of the United States, which monitors judges, to make clear that the use of non-public information by federal employees and by judges for “private profit” is prohibited.
The House is expected to advance a companion bill being drafted by Majority Leader
Cantor “plans to move an expanded version” of the legislation similar to the Senate bill through the House in February, said Laena Fallon, a Cantor spokesman.
Senate Starts Potentially Lengthy Insider-Trading Debate
Cantor on Monday night said he was pleased to see the Senate moving to take up “an expanded version” of the legislation.
“While the current Senate bill is a step in the right direction, there are other areas where it can be strengthened, such as applying disclosure requirements to the executive branch and their employees in a position to gain from insider information,” Cantor said.
He said he would “closely monitor the Senate’s progress as the measure is strengthened during the amendment process” and would “ensure action” that meets the goals of the measure “in the most timely manner possible.”
Lawmakers have been pushing such legislation since CBS’s “60 Minutes” in mid-November accused lawmakers of using their positions to pad their pocketbooks. The program suggested that current SEC regulations do not apply to those who walk the halls of the Capitol.
Sponsors of the insider-trading ban say the bill’s prospects of passage are strong.
“I think people have a lot of consensus around it; I’m optimistic,” said New York Democrat
But some critics, including Oklahoma Republican Sen.
Coburn and North Carolina Republican
Hart said Coburn will offer amendments to ban earmarks and require legislation to be published online for three days and studied by the Congressional Research Service for redundancy with other laws and programs before floor consideration.
Some House Democrats are pushing for action on the legislation.
“Tonight our counterparts in the Senate will begin voting on a bill that has been in their chamber for 11 weeks,” Slaughter said in a news release. “I’ve been pushing the STOCK Act in the House for almost six years.”
A majority of House lawmakers have cosponsored that version (
Amendments and Clarifications
Senate Starts Potentially Lengthy Insider-Trading Debate
Reid’s substitute amendment removes one source of lawmaker concern, the ambiguous phrase “personal benefit,” replacing it with “private profit.” His amendment also indicates the ban would only relate to finances.
Although the bill as written affirms the ban on the use of insider trading for personal benefit, it does not define the phrase. Such vague language has led some lawmakers to question whether members might be prosecuted for gaining non-financial benefits, such as personal recognition or support from a group, from insider information.
During a Senate Homeland Security and Governmental Affairs Committee markup in December, ranking Republican
Aides on the panel said they expect a number of pertinent amendments to the bill, including some that would extend or shorten the deadline for lawmakers and aides to report purchases or sales of stocks, bonds, commodities and other investments. The bill currently would require such transactions to be disclosed within 30 days, but Ohio Democrat
Niels Lesniewski contributed to this story.