U.S. Rep. Tim Walz, D-Minn., won a symbolic victory today when the Senate passed a bill designed to combat insider trading in Congress.
After five years of languishing in limbo, Walz's ethics reform legislation, the Stop Trading on Congressional Knowledge (STOCK) Act, passed with bipartisan support. The legislation would bar members of Congress, Capitol Hill staff and senior executive branch advisers from using insider information gleaned on the job when they trade stock and securities.
During his State of the Union address in January, President Barack Obama challenged members of Congress to pass the STOCK Act. Now the legislation, albeit a weaker version than Walz envisioned, is headed to the White House for his signature and final approval.
The bill headed to Obama is a stripped-down version of Walz’s original legislation. It does not regulate consultants seeking to glean information from White House or Capitol Hill staff members about legislative proposals, with the intent to help their clients -- typically hedge funds or Wall Street traders -- make shrewd moves before decisions on votes that could influence markets.
The growing "political intelligence" industry was a target for Walz, but the legislation now calls for a federal study of the industry. House Republicans also removed a Senate bill provision that would have banned federal earmarks, but added one that would restrict congressional members from acquiring initial public offerings of stock.