Bill passed into LAW banning Congress from Insider Trading!!!

I wanted to give you some good news about the bill banning insider trading in Congress that you took action on a few months back.

This week, the President signed that bill into law, making members of Congress play by the same rules as everyone else when it comes to investing. Before this week, it was -- amazingly -- not against the law for members of Congress to profit off of the insider information they pick up on Capitol Hill.

Hundreds of thousands of Americans like you stepped up and played a role in passing the STOCK Act, so thanks for standing with the President.
President Obama promised that he would work to change the old ways of Washington, and this is what that change looks like. There's still more that we have to do, obviously, but thanks to your support, we've made a step in the right direction.

Volcker Rule

The “Volcker Rule”  prohibits an insured depository institution and its affiliates from:

• engaging in “proprietary trading”;

• acquiring or retaining any equity, partnership, or other ownership interest in a hedge fund or private equity fund; and

• sponsoring a hedge fund or a private equity fund.

Nonbank financial companies designated by the Council for supervision by the Board of Governors would not be subject to this prohibition. The Act provides, however, that they could be subject to additional capital requirements for, and additional quantitative limits with respect to, the foregoing activities.

The Volcker Rule would apply to proprietary trading and fund activities by U.S. banking organizations regardless of where the trading or activities are conducted. However, for non-U.S. banking organizations, the Volcker Rule would apply only to proprietary trading and fund activities in the U.S., or such activities outside the U.S., if they involve the offering of securities to any U.S. resident.

While the Volcker Rule has been moderated since its inception, these limitations would have a significant impact on the ability of U.S. banking organizations to provide investment management products and services that are competitive with nonbanking firms generally and with non-U.S. banking organizations in overseas markets. It would also effectively prohibit short-term trading strategies by any U.S. banking organization, regardless of the location of its trading business, if those strategies involve instruments other than those specifically permitted for trading

House & Senate wish to remain above the law on insider trading = read the not so fine print.

WASHINGTON — In an effort to regain public trust, the Senate voted Monday to take up a bill that would prohibit members of Congress from trading stocks and other securities on the basis of confidential information they receive as lawmakers. 

The vote was 93 to 2. 

Senators of both parties said the bill was desperately needed at a time when the public approval rating of Congress had sunk below 15 percent. 

“The American public has no confidence in Congress,” said Senator Kirsten E. Gillibrand, Democrat of New York, who introduced an earlier version of the legislation. 

At the same time, Democratic senators moved to tap into concerns about comparatively low tax rates paid by some of the nation’s top earners, introducing a bill that would require households with more than $1 million of adjusted gross income to pay at least 30 percent of it in taxes. 

A handful of lawmakers have tried for years to enact restrictions on stock dealing by members of Congress. But their efforts drew little support until new attention on the practice last year — coupled with election anxiety — prompted a flood of backing for the idea and support from President Obama in his State of the Union address. 

The bill states that members and employees of Congress are not exempt from the federal law and regulations that ban insider trading. 

“No member of Congress and no employee of Congress shall use any nonpublic information derived from the individual’s position as a member of Congress or employee of Congress, or gained from performance of the individual’s duties, for personal benefit,” the bill says. 

Federal securities law does not explicitly exempt members of Congress, but experts disagree on whether and when lawmakers may be found to have violated the law. The bill is meant to eliminate any ambiguity.

It says that lawmakers have “a duty arising from a relationship of trust and confidence” to Congress, the federal government and the citizens of the United States — a duty they violate by trading on nonpublic information. 

The bill also requires members of Congress to disclose the purchase or sale of stocks, bonds, commodities futures and other forms of securities within 30 days of transactions. The information would be posted on the Web in a searchable format. 

In his speech last week, Mr. Obama urged Congress to act, citing what he called “the corrosive influence of money in politics.” 

“Send me a bill that bans insider trading by members of Congress,” Mr. Obama said. “I will sign it.”

The Senate was already writing such a bill. 

However, the bill does not subject lawmakers to a second type of restriction suggested by Mr. Obama, who said Congress should “limit any elected official from owning stocks in industries they impact.”

Congress & their staff are permitted by law to trade on insider information!!!!

"Insider trading" by members of Congress seems to cause similar reactions in most. "Isn't that already illegal?" is the common refrain. And why wouldn't it be, as insider trading lands everyone else in the U.S. -- and most industrialized countries -- in jail and slaps them with huge fines. The fact that a little-known loophole permits members of Congress and their staffs to buy and sell stocks using insider information they might obtain through their official work rightly strikes most citizens as outrageous.

The now infamous 60 Minutes documentary from earlier this month shone a bright light on the obvious opportunities members of Congress and their staffs have to use information gleaned in day-to-day business for personal gain in the stock and commodities markets. The increasing scrutiny seems to be providing the necessary energy to finally spur action on the STOCK Act, introduced in the House of Representatives by Reps. Louise Slaughter (D-N.Y.) and Tim Walz (D-Minn.). This legislation would increase disclosure and highlight conflicts of interests for lawmakers and ensure that they do not benefit from their insider knowledge.


The bill has languished since 2006 due to a lack of attention. However in just the few weeks since this issue was so publicly flagged, the number of co-sponsors in the House on the STOCK Act has grown from nine to 99, and both Sens. Scott Brown (R-Mass.) and Kristen Gillabrand (D-N.Y.) have introduced companion legislation in the Senate that would change Senate rules to ban insider trading. "When members of Congress personally benefit from the legislation that they shape and vote on, there is a clear conflict of interest, and its effect on legislation can be corrosive," Brown wrote in a letter to his colleagues.


With Sen. Joseph Lieberman (I-Conn.) helding a hearing on the measure , and a Dec. 6 hearing in the House scheduled by Rep. Spencer Bachus (R-Ala.) (who chairs the committee and was one of the lawmakers who came under scrutiny from 60 Minutes, though he denied improper trading), the attention on the issue will likely continue to grow.


The attention is warranted, as a report released earlier this year by four universities found that on average, stock portfolios held by House members from 1985 to 2001 beat the market average by approximately 6 percent annually. In 2004, the same group of professors found that the average stock portfolios held by members of the Senate beat the market average by about 10 percent.