During his State of the Union address, President Obama said “send me a bill that bans insider trading by members of Congress; I will sign it tomorrow. Let’s limit any elected official from owning stocks in industries they impact.” The remark stemmed from a 60 Minutes investigation showing that House Financial Services Chairman Spencer Bachus (R-AL) profited from information he received in private briefings during the economic crisis of 2008.
The Senate, in a rare display of bipartisanship, opened debate on an insider trading ban by a vote of 93-2. However, the bill has since become bogged down under a sea of unrelated amendments.
Over in the House, meanwhile, House Majority Leader Eric Cantor (R-VA) — who reportedly blocked Bachus from bringing up a ban on congressional insider trading in committee — wants to expand the legislation to include bans on other sorts of transactions, such as land deals. UCLA Law Prof. Stephen Bainbridge notes that this is likely an attempt by Cantor to kill the bill by making it so overly broad that no one will vote for it:
[Cantor's] now trying to extend the STOCK Act “so it includes land deals and other types of transactions and not just stock trades.” Classic taking a good idea too far. The problem is insider trading in stocks, not insider trading in land deals.Cantor obviously hopes that including a vast array of economic activity within the bill, exposing members of Congress to disclosure obligations and other restrictions, as well as increasing their liability exposure, will make the bill sufficiently unpopular so as to prevent its passage.
The Stop Trading on Congressional Knowledge (STOCK) Act has picked up 273 co-sponsors, after languishing for months with nearly no interest.
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