Jack Maskell
Legislative Attorney
The STOCK Act (Stop Trading on Congressional Knowledge Act of 2012) was signed into law on April 4, 2012. It affirms and makes explicit the fact that there is no exemption from the “insider trading” laws and regulations for Members of Congress, congressional employees, or any federal officials. The law also expressly affirms that all federal officials have a “duty” of trust and confidentiality with respect to nonpublic, material information which they may receive in the course of their official duties, and a duty not to use such information to make a private profit.
The STOCK Act, as part of the law’s regulation of securities transactions by public officials, now requires expedited, periodic public disclosure of covered “financial transactions” by all officials in the executive and legislative branches of the federal government who are covered by the public reporting provisions of the Ethics in Government Act of 1978, as amended. The act thus works to require not only annual public reporting of such transactions (which reporting has been required since 1978), but also now requires public reporting within 30 days of receipt of a notice of a covered financial transaction (but in no event more than 45 days after such transaction). These periodic reports are filed with reference to any financial transactions of $1,000 or more in securities, but are not required for transactions in mutual funds or income-producing real property.
The act as originally adopted had required all public financial disclosure statements filed under the Ethics in Government Act in the legislative and executive branches to eventually be made in electronic form, and to be posted on the Internet where they may be publicly searched, sorted, and, if a log-in protocol is followed, downloaded from official government websites. Because of safety concerns, privacy threats, and the possibility of malicious use of such data, federal executives and employees complained about the Internet posting of their detailed financial information, and filed suit to stop the requirement to post such information on the Internet. Congress responded by amending the Stock Act to delay the Internet posting requirements of the public personal financial disclosure reports until a study could be made on the potential impact of having such personal financial information available on the Internet. Legislation (S. 716, 113th Congress) was signed into law on April 15, 2013 (P.L. 113-7, 127 Stat. 438) which permanently rescinds the requirement for Internet posting for most covered employees in the legislative and executive branches of the United States Government. However, the requirement for Internet posting of the financial disclosure reports and all financial information filed by Members of Congress, the President and Vice President, candidates for Congress, and federal officials appointed by the President and confirmed by the Senate in positions on the Executive Schedule at Levels I (cabinet level) and II, remains in effect, and such information and reports are still required to be posted on the Internet.
Date of Report: April 18, 2013
Number of Pages: 11
Order Number: R42495
Price: $29.95
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