Like millions of Americans all across the country, I was surprised to learn that insider trading by members of Congress, their families or their staff, using non-public information gained through their Congressional work, is not already clearly and expressly illegal.
The American people need to know that their elected leaders play by the exact same rules that they play by. They also deserve the right to know their lawmakers’ only interest is what’s best for the country, not their own financial interests.
Members of Congress, their families and staff shouldn’t be able to gain personal profits from information they have access to that everyday middle-class families don’t. It’s simply not right — nobody should be above the rules.
To fix this, I recently introduced a bipartisan bill in the Senate with 24 of my colleagues to close this loophole. This STOCK Act legislation is very similar to the legislation introduced by my colleagues in the House of Representatives, Louise Slaughter and Tim Walz, who have long championed this issue. Our mission is to pass a strong bill with teeth that will make any and all insider trading clearly illegal and a violation of congressional rules for all members of Congress, their families and their staff. Anything less is unacceptable.
Last week, legislation based on our bill passed out of the Senate Homeland Security and Governmental Affairs Committee, moving us an important step closer to final passage on the Senate floor.
This bill, which has received the support of at least seven good-government advocacy groups, covers several important principles and represents the strongest proposal yet to crack down on the insider trading loophole:
First, members of Congress, their families and their staff would be clearly and explicitly barred from buying or selling securities on the basis of knowledge gained through their congressional service. The SEC and CFTC must be empowered to investigate these cases. To provide additional teeth — such acts will also be a violation of Congress’s own rules, to make clear that this activity is inappropriate.
Next, members would be required to disclose major transactions within 30 days, providing dramatically improved oversight and accountability from the current annual reporting requirements.
Finally, we will make it illegal to pass “insider information” to a friend, lobbyist or anyone else for the purpose of trading. Our bill will also ensure that the member or staff that provides non-public, material policy information to third persons with the intent to assist that individual with a financial trade could be held liable for “tipping” that individual.
There are some critics who say we don’t need to pass this common-sense legislation because it is already covered under current statutes. I have spoken with experts tasked in the past with investigations of this nature who strongly disagree. It is clear that we must make it unambiguous that this kind of behavior is illegal. Others have said we are moving too fast — we believe Americans expect Congress to move quickly on this kind of common-sense reform. It is not a Democratic or Republican idea — it is simply what New Yorkers deserve.
New Yorkers deserve a Congress that is significantly more transparent and accountable, which is why I have led by example my entire career in this effort. Fortunately, Congress is beginning to get the message. We must now take the next step and pass a bill to begin restoring trust to this broken Congress.