The United States Senate has passed a bill that would ban lawmakers from trading stocks based on the information they acquire while performing their Congressional duties.
The Stop Trading on Congressional Knowledge Act now requires to be passed by the House of Representatives before it is signed into law by President Barack Obama, who was quick to welcome the Senate passage of the bill.
"No one should be able to trade stocks based on nonpublic information gleaned on Capitol Hill. So I'm pleased the Senate took bipartisan action to pass the Stock Act. I urge the House of Representatives to pass this bill, and I will sign it right away," Obama said.
The Stock Act received a bipartisan support: 96-3.
"While this is an important step to rebuild the trust between Washington and the American people, there is much more work to be done, like prohibiting elected officials from owning stocks in industries they impact, and prohibiting people who bundle campaign contributions for Congress from lobbying Congress, an idea that has bipartisan support outside of Washington," Obama said.
This legislation will ensure that members of Congress will be prosecuted if they abuse the public trust to gain financial advantage, said Senate Majority Leader Harry Reid.
Elected officials should play by the same rules as everyone else, and they should never use insider information to enrich themselves, he said.
Leader of the Republican Party - which holds majority in the House of Representatives -
said that they plan to vote on it next week.
"We will quickly review the entire bill and the amendments that were added today to ensure that public servants, whether in the legislative or executive branch, do not personally profit from insider information," House Majority Leader Eric Cantor said.
"With this vote, the Senate has established that members of Congress and their staffs have a duty of trust to the American people that explicitly bars them from insider trading," said Homeland Security and Governmental Affairs Committee Chairman Joe Lieberman.
The Stock Act clarifies an ambiguity in the 1934 Securities and Exchange Act by prohibiting members of Congress and their staffs from trading on non-public information they obtain by virtue of their positions that is not available to the general public.
The bill also requires disclosure 30 days after any securities trade over $1,000 and would require all disclosures to be available electronically.
Amendments added to the bill on the Senate floor would require securities trades and financial disclosure statements of about 300,000 Executive Branch employees to be published online; and mortgages of members of Congress, their staff, and top level Executive Branch employees to be published on line.
It also requires so-called "political intelligence consultants" - who gather information to sell to investors - to disclose their activities and clients the same way lobbyists do.
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