[Wildcatk23]

President Obama has signed an act making it clear that members of Congress cannot use confidential information they learn on the job to trade stocks or other securities for their personal benefit.

The insider trading ban also applies to their staff and officials in the executive and judicial branches of federal government.

Similar bills had been introduced in the past few years but went nowhere until a "60 Minutes" episode in November focused on questionable stock trades by members of Congress.

The Stop Trading on Congressional Knowledge or Stock Act, which passed Congress with strong bipartisan support, also:

-- Requires lawmakers to publicly disclose their trades in stock, bonds and certain other securities within 45 days of a transaction. This information will be posted on government websites and eventually in searchable databases. Previously, they only had to file an annual report disclosing their investments.

This provision should make it easier to detect illegal insider trading, but it's not as strict as the disclosure requirement Congress imposed on corporate executives in 2002. The Sarbanes-Oxley Act requires corporate insiders to disclose trades in their companies' shares within two business days.

-- Requires members of Congress and certain senior government employees to disclose the terms of their personal mortgages.

-- Prevents members of Congress and high-ranking government officials from investing in initial public offerings "in any manner other than is available to members of the public generally."

-- Requires members of Congress to forfeit their pension benefits if they are convicted of certain corruption offenses committed while serving as an elected official.

-- Requires members of Congress and senior federal employees to notify their ethics office in writing when they start a job negotiation to leave the government.

The Securities and Exchange Commission and some legal scholars said that federal lawmakers were always covered by the securities laws used to prosecute illegal insider trading. But that question had never been tested in court.

To win an insider trading case, the SEC must show that a person traded on material nonpublic information in violation of a duty not to do so.

"It's not simply that you use material nonpublic information, but you have obtained that by misappropriating it or obtaining it in breach of duties you owe someone," says John Coffee, a securities law professor at Columbia Law School.

Employees clearly owe a duty to their employers, as do attorneys, investment bankers and others who work for clients. But it was never entirely clear to whom, if anyone, members of Congress owed a duty not to disclose information.

Coffee says it's possible that half of the federal appeals courts could find that a lawmaker did not owe anyone a duty not to trade on confidential information gained on the job, although the Supreme Court would probably find that he or she did.

The Stock Act makes it clear that members of Congress and their employees "are not exempt from the insider trading prohibitions arising under the securities laws." It says that each member and employee of Congress "owes a duty arising from a relationship of trust and confidence to the Congress, the United States Government, and the citizens of the United States with respect to material, nonpublic information" obtained on the job.

Blair Bowie, a democracy advocate with the U.S. Public Interest Research Group, says the bill Obama signed into law Wednesday "is not as strong" as the version that passed the Senate, but "it's an important step toward restoring trust in Washington." A bigger step, she says, is campaign finance reform.

One of the two "key provisions" stripped from the bill would have "required people walking around Congress trying to collect information about bills that will affect the stock market to register as lobbyists," Bowie says.

Instead, the Stock Act merely requires a government study, due within one year, of so-called political intelligence companies that sell such information to hedge funds and other investors.

The other key provision would have given prosecutors new tools to go after corrupt public officials.



Read more: http://www.sfgate.com/cgi-bin/article.cg...z1rDbNpSpN

[Amun-Ra]

Anyone object to this? I like it.

[TheRealVille]

Anyone object to this? I like it.

No.

[vundy33]

Looks good to me.

[RunItUpTheGut]

The smartest thing ive seen him do.

[tvtimeout]

I like it!

[WideRight05]

Looks good on paper, but I just don't trust this guy. There has to be something to it...

[Wildcatk23]

Looks good on paper, but I just don't trust this guy. There has to be something to it...

Something to not allowing Congress to use confidential information they learn on the job to trade stocks or other securities for their personal benefit?

[WideRight05]

Something to not allowing Congress to use confidential information they learn on the job to trade stocks or other securities for their personal benefit?

Not that at all, but something else he might slip through with the act that he wants to get through. There may be something, there may not. This one just surprises me because it doesn't sound like something obama would do.

But if this is all there is to the act, hey, I'm all for it!

[Hoot Gibson]

A small bipartisan group in Congress has been trying to get a vote on this bill for a long time. They deserve credit for their persistence and for shining a bright light on the crooks in our federal government who have been using insider information to grow wealthy for many years.

This is something that either Bush or Obama could have shamed Congress into passing but neither chose to take the lead. There is no way that Obama could veto this legislation in an election year but he will undoubtedly hog credit for the new law.

[Amun-Ra]

Who really cares if he hogs the spot light on this as long as it gets passed. Seriously?

[Hoot Gibson]

Who really cares if he hogs the spot light on this as long as it gets passed. Seriously?

I do. Obama deserves credit for not vetoing the bill but that was the only role that he played in the this bill becoming law. 60 Minutes and the small bipartisan group in Congress that kept this issue alive all deserve much more credit than Obama for the bill making it to his desk.

The bill was voted upon and signed into law only because this is an election year and neither Obama nor Congress critters - both Democrats and Republicans - who are running for re-election wanted insider trading to be an issue this fall. Otherwise, this bill would never have seen the light of day.

[Wildcatk23]

Who really cares if he hogs the spot light on this as long as it gets passed. Seriously?

Lol did u really ask that on here. If it even sounds like your defending Obama your going to get blasted. But at the end of the day he signed it. The reason really doesn't matter.

[Amun-Ra]

I know.

[TheRealVille]

I do. Obama deserves credit for not vetoing the bill but that was the only role that he played in the this bill becoming law. 60 Minutes and the small bipartisan group in Congress that kept this issue alive all deserve much more credit than Obama for the bill making it to his desk.

The bill was voted upon and signed into law only because this is an election year and neither Obama nor Congress critters - both Democrats and Republicans - who are running for re-election wanted insider trading to be an issue this fall. Otherwise, this bill would never have seen the light of day.

Kind of like you give Clinton credit for NAFTA that he signed as soon as he got in office, when it was Bush 1's baby, with Clinton only adding clauses to protect the American worker? Bush "fast tracked" it trying to get it signed into law, but ran out of time.

[Hoot Gibson]

Kind of like you give Clinton credit for NAFTA that he signed as soon as he got in office, when it was Bush 1's baby, with Clinton only adding clauses to protect the American worker? Bush "fast tracked" it trying to get it signed into law, but ran out of time.

Clinton actively supported NAFTA, as did Bush. They both deserved credit for it. if Clinton had opposed it, all he had to do was withdraw his support and claim a popular mandate. I generally favor free trade and don't recall criticizing Clinton for signing it. I have pointed out the hypocrisy of big labor union bosses (and you) supporting candidates who have actively opposed attempts to secure our southern border to prevent the importation of cheap. illegal labor.

[Hoot Gibson]

Is it not amusing to see liberals who have no problem with Obama blaming Bush for all of his own failures so eagerly criticizing me for not wanting to give him credit that he does not deserve for the passage of this bill? nicker:

When Rick Perry wrote an editorial urging Congress to pass a bill to ban insider trading by members of Congress, where were liberals with their accolades? Nowhere to be found as I recall when I created a thread on this subject three months ago.

Congress decided to take action to avoid embarrassment on the campaign trail.

[INDENT]Stop Insider Trading Dead In Its Tracks

Making Congressional insider trading a keystone issue can be a winning strategy for some conservative candidate. It may be too late for the issue to save Rick Perry's campaign but other conservatives need to jump on this issue before Obama does. Obama intends to run against Congress this year, and this issue has legs.

(This is a Rick Perry editorial but he is stirring up a hornet's nest for both parties' members of Congress. Only a handful of people in Congress favor making trading on insider information illegal for members of Congress and this should be an extremely embarrassing issue for the leadership of both parties in both the House and Senate. If Republicans don't jump on the issue, then Obama might beat them to the punch.)...

[/INDENT]