Proposal 2: Congressional Insider Trading and The STOCK Act

Last week I chose to focus my White Paper on the issue of congressional insider trading and the profiting that takes place behind the scenes on Capitol Hill involving government representatives making personal financial decisions based on non-public information. This year, Congress passed a bill to address this issue with the STOCK Act, which is short for “Stop Trading on Congressional Knowledge Act.” The bill was signed into law by President Obama on April 4th, 2012 as a measure to combat congressional misuse of non-public information and is a significant step in the right direction. For a government perspective on the issue, I turned to the White House factsheet on the STOCK Act.

After reading the summary, I was comforted by the claim that, “the President will continue to work with Congress to do even more to help fight the destructive influence of money in politics and rebuild the trust between Washington and the American people.” The big question that remains is whether or not the bill has made a difference in the status quo and if more can actually be done.

Critics of the law believe that a number of loopholes continue to exist and that more needs to be done in order to make the STOCK bill an effective piece of legislation. One such proposal involves spreading disclosure requirements to spouses and children of politicans to ensure that they too are not profiting non-public information. On the other hand, some people believe that the STOCK Act has gone too far to the point of becoming a violation of privacy and security threat.

I look forward to continuing my research into the topic of congressional insider trading and it’s current significance and impact on our nation’s business, government and society.



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