Congress closes loophole in stock trading law following report
Republicans in the U.S. House of Representatives were forced to close a potential loophole on their much-touted insider trading law, which CNN uncovered and reported on last month. Due to CNN’s report, the Senate and House passed new legislation on Thursday to close the loophole that could have allowed family members of some lawmakers to profit from inside information.
In April, President Barack Obama signed the STOCK Act, one of the rare bipartisan bills passed this year. The legislation, also known as the Stop Trading On Congressional Knowledge Act, required that any trades of $1,000 or more made on or after July 3, be reported to the House and Senate within 45 days. However, the Republican dominated House and the Democratic controlled Senate took two completely different interpretations of the rule. House members and aides covered by the law believed their spouses and children were not covered and didn’t need to file periodic reports. It was CNN who brought the discrepancy to the Senate’s attention last month. Republican Scott Brown of Massachusetts, the only Republican senator to attend the White House signing ceremony, said he was “obviously very concerned.” In an interview with CNN, Brown said, “Say I find out some information, I tell my wife and she goes and trades on it, what’s the difference?”
“The House interpretation leaves a loophole and the appearance of an ongoing double standard,” Brown fired in a letter to his GOP constituents House Speaker John Boehner and House Majority Leader Eric Cantor.