Congress Cracks Down On Insider Trading

A watered-down version of a bill banning members of Congress from trading on insider information passed the Senate and is on its way to President Obama's desk.

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DAVID GREENE, HOST:

NPR's business news starts with Congress cracking down on itself.

Yesterday, the Senate passed the Stop Trading on Congressional Knowledge Act. It's known by its convenient acronym, the Stock Act, and it explicitly bans insider trading by members of Congress and the executive branch.

NPR's Tamara Keith reports.

TAMARA KEITH, BYLINE: Congresswoman Louise Slaughter, a New York Democrat, has been working on this issue for years - six years.

REP. LOUISE SLAUGHTER: It was a good bipartisan bill. I think it's probably unlike anything else that's going to pass this year.

KEITH: It only got two no votes in the House, and passed with unanimous consent in the Senate. That kind of overwhelming support is usually reserved for naming post offices after war heroes. But after a "60 Minutes" story aired last fall, highlighting the issue of members of Congress benefitting from non-public information, the bill took off.

Scott Brown, the Massachusetts Republican, is one of the bill's authors in the Senate.

SEN. SCOTT BROWN: We have to live by the same rules that everybody else lives by. It's kind of a no-brainer for me. When I saw the "60 Minutes" piece, I was like, really?

KEITH: In addition to making it crystal clear that insider trading by members of Congress, their staffs and some in the executive branch isn't allowed, the bill also adds a big, new dose of sunshine. Congressional and executive branch stock trades will now have to be reported electronically within 30 days. Before, it was only once a year and on paper forms that were hard for the public to access.

Many had been hoping this bill would go even further. Craig Holman, a lobbyist for Public Citizen, says earlier versions were watered down.

CRAIG HOLMAN: I mean, it's still a useful bill. But it omits two of the strongest and most desperately needed ethics provisions that were in the original Senate act.

KEITH: One would have required people selling insider information about Congress to hedge funds to register, like lobbyists. Another would have made it easier to prosecute public corruption.

Tamara Keith, NPR News.

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