Stop Trading on Congressional Knowledge Act - Amends the Securities Exchange Act of 1934 and the Commodity Exchange Act to direct both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to prohibit purchase or sale of either securities, security-based swaps, or commodities for future delivery or swap by a person in possession of material nonpublic information regarding pending or prospective legislative action if the information was obtained: (1) knowingly from a Member or employee of Congress, (2) by reason of being a Member or employee of Congress, or (3) from other federal employees and derived from their federal employment.
Amends the Code of Official Conduct of the Rules of the House of Representatives to prohibit any Member, officer, or employee of the House from disclosing material nonpublic information relating to any pending or prospective legislative action relating to any publicly-traded company or to any commodity if such person has reason to believe that the information will be used to buy or sell the securities of that publicly traded company or that commodity for future delivery based on such information.
Directs both the Committee on Agriculture and the Committee on Financial Services of the House of Representatives to hold hearings on the implementation by the CFTC and the SEC of such financial transaction prohibitions.
Amends the Ethics in Government Act of 1978 to require formal disclosure of certain securities and commodities futures transactions to either the Clerk of the House of Representatives or the Secretary of the Senate.
Amends the Lobbying Disclosure Act of 1995 to subject to its registration, reporting, and disclosure requirements, as well as requirements for identification of clients and covered legislative and executive officials, all political intelligence activities, contacts, firms, and consultants. Requires the Comptroller General to include political intelligence activities, contacts, firms, and consultants in its annual compliance audits and reports.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1148 Introduced in House (IH)]
112th CONGRESS
1st Session
H. R. 1148
To prohibit commodities and securities trading based on nonpublic
information relating to Congress, to require additional reporting by
Members and employees of Congress of securities transactions, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 17, 2011
Mr. Walz of Minnesota (for himself and Ms. Slaughter) introduced the
following bill; which was referred to the Committee on Financial
Services, and in addition to the Committees on Agriculture, House
Administration, the Judiciary, and Select Ethics, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To prohibit commodities and securities trading based on nonpublic
information relating to Congress, to require additional reporting by
Members and employees of Congress of securities transactions, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Stop Trading on Congressional
Knowledge Act''.
SEC. 2. NONPUBLIC INFORMATION RELATING TO CONGRESS AND OTHER FEDERAL
EMPLOYEES.
(a) Commodities Transactions.--Section 4c of the Commodity Exchange
Act (7 U.S.C. 6c) is amended by adding at the end the following:
``(h) Nonpublic Information Relating to Congress.--Not later than
270 days after the date of enactment of this subsection, the Commission
shall by rule prohibit any person from buying or selling any commodity
for future delivery or swap while such person is in possession of
material nonpublic information, as defined by the Commission, relating
to any pending or prospective legislative action relating to such
commodity if--
``(1) such information was obtained by reason of such
person being a Member or employee of Congress; or
``(2) such information was obtained from a Member or
employee of Congress, and such person knows that the
information was so obtained.
``(i) Nonpublic Information Relating to Other Federal Employees.--
``(1) Rulemaking.--Not later than 270 days after the date
of enactment of this subsection, the Commission shall by rule
prohibit any person from buying or selling any commodity for
future delivery or swap while such person is in possession of
material nonpublic information derived from Federal employment
and relating to such commodity if--
``(A) such information was obtained by reason of
such person being an employee of an agency, as such
term is defined in section 551(1) of title 5, United
States Code; or
``(B) such information was obtained from such an
employee, and such person knows that the information
was so obtained.
``(2) Material nonpublic information.--For purposes of this
subsection, the term `material nonpublic information' means any
information that an employee of an agency (as such term is
defined in section 551(1) of title 5, United States Code) gains
by reason of Federal employment and that such employee knows or
should know has not been made available to the general public,
including information that--
``(A) is routinely exempt from disclosure under
section 552 of title 5, United States Code, or
otherwise protected from disclosure by statute,
Executive order, or regulation;
``(B) is designated as confidential by an agency;
or
``(C) has not actually been disseminated to the
general public and is not authorized to be made
available to the public on request.''.
(b) Securities Transactions.--Section 10 of the Securities Exchange
Act of 1934 is amended by adding at the end the following:
``(d) Nonpublic Information Relating to Congress.--Not later than
270 days after the date of enactment of this subsection, the Commission
shall by rule prohibit any person from buying or selling the securities
or security-based swaps of any issuer while such person is in
possession of material nonpublic information, as defined by the
Commission, relating to any pending or prospective legislative action
relating to such issuer if--
``(1) such information was obtained by reason of such
person being a Member or employee of Congress; or
``(2) such information was obtained from a Member or
employee of Congress, and such person knows that the
information was so obtained.
``(e) Nonpublic Information Relating to Other Federal Employees.--
``(1) Rulemaking.--Not later than 270 days after the date
of enactment of this subsection, the Commission shall by rule
prohibit any person from buying or selling the securities or
security-based swaps of any issuer while such person is in
possession of material nonpublic information derived from
Federal employment and relating to such issuer if--
``(A) such information was obtained by reason of
such person being an employee of an agency, as such
term is defined in section 551(1) of title 5, United
States Code; or
``(B) such information was obtained from such an
employee, and such person knows that the information
was so obtained.
``(2) Material nonpublic information.--For purposes of this
subsection, the term `material nonpublic information' means any
information that an employee of an agency (as such term is
defined in section 551(1) of title 5, United States Code) gains
by reason of Federal employment and that such employee knows or
should know has not been made available to the general public,
including information that--
``(A) is routinely exempt from disclosure under
section 552 of title 5, United States Code, or
otherwise protected from disclosure by statute,
Executive order, or regulation;
``(B) is designated as confidential by an agency;
or
``(C) has not actually been disseminated to the
general public and is not authorized to be made
available to the public on request.''.
SEC. 3. AMENDMENT TO THE RULES OF THE HOUSE OF REPRESENTATIVES
REGARDING FINANCIAL TRADING BASED ON NONPUBLIC
INFORMATION.
Rule XXIII (known as the ``Code of Official Conduct'') of the Rules
of the House of Representatives is amended by redesignating clause 18
as clause 19 and by inserting after clause 17 the following new clause:
``18. A Member, Delegate, Resident Commissioner, officer,
or employee of the House shall not--
``(a) disclose material nonpublic information
relating to any pending or prospective legislative
action relating to any publicly traded company if that
Member, Delegate, Resident Commissioner, officer, or
employee has reason to believe that the information
will be used to buy or sell the securities of such
publicly traded company based on such information; or
``(b) disclose material nonpublic information
relating to any pending or prospective legislative
action relating to any commodity if that Member,
Delegate, Resident Commissioner, officer, or employee
has reason to believe that the information will be used
to buy or sell such commodity for future delivery based
on such information.''.
SEC. 4. COMMITTEE HEARINGS ON IMPLEMENTATION.
(a) In General.--The Committee on Agriculture of the House of
Representatives shall hold a hearing on the implementation by the
Commodity Futures Trading Commission of subsections (h) and (i) of
section 4c of the Commodity Exchange Act (as added by section 2(b) of
this Act), and the Committee on Financial Services of the House of
Representatives shall hold a hearing on the implementation by the
Securities Exchange Commission of subsections (d) and (e) of section 10
of the Securities Exchange Act of 1934 (as added by section 2(a) of
this Act).
(b) Exercise of Rulemaking Authority.--Subsection (a) is enacted--
(1) as an exercise of the rulemaking power of the House of
Representatives and, as such, shall be considered as part of
the rules of the House, and such rules shall supersede any
other rule of the House only to the extent that rule is
inconsistent therewith; and
(2) with full recognition of the constitutional right of
the House to change such rules (so far as relating to the
procedure in the House) at any time, in the same manner, and to
the same extent as in the case of any other rule of the House.
SEC. 5. TIMELY REPORTING OF FINANCIAL TRANSACTIONS.
(a) Reporting Requirement.--Section 103 of the Ethics in Government
Act of 1978 is amended by adding at the end the following subsection:
``(l) Within 90 days after the purchase, sale, or exchange of any
stocks, bonds, commodities futures, or other forms of securities that
are otherwise required to be reported under this Act and the
transaction of which involves at least $1000 by any Member of Congress
or officer or employee of the legislative branch required to so file,
that Member, officer, or employee shall file a report of that
transaction with the Clerk of the House of Representatives in the case
of a Representative in Congress, a Delegate to Congress, or the
Resident Commissioner from Puerto Rico, or with the Secretary of the
Senate in the case of a Senator.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to transactions occurring on or after the date that is 90 days
after the date of the enactment of this Act.
SEC. 6. DISCLOSURE OF POLITICAL INTELLIGENCE ACTIVITIES UNDER LOBBYING
DISCLOSURE ACT.
(a) Definitions.--Section 3 of the Lobbying Disclosure Act of 1995
(2 U.S.C. 1602) is amended--
(1) in paragraph (2)--
(A) by inserting after ``lobbying activities'' each
place that term appears the following: ``or political
intelligence activities''; and
(B) by inserting after ``lobbyists'' the following:
``or political intelligence consultants''; and
(2) by adding at the end the following new paragraphs:
``(17) Political intelligence activities.--The term
`political intelligence activities' means political
intelligence contacts and efforts in support of such contacts,
including preparation and planning activities, research, and
other background work that is intended, at the time it is
performed, for use in contacts, and coordination with such
contacts and efforts of others.
``(18) Political intelligence contact.--
``(A) Definition.--The term `political intelligence
contact' means any oral or written communication
(including an electronic communication) to or from a
covered executive branch official or a covered
legislative branch official, the information derived
from which is intended for use in analyzing securities
or commodities markets, or in informing investment
decisions, and which is made on behalf of a client with
regard to--
``(i) the formulation, modification, or
adoption of Federal legislation (including
legislative proposals);
``(ii) the formulation, modification, or
adoption of a Federal rule, regulation,
Executive order, or any other program, policy,
or position of the United States Government; or
``(iii) the administration or execution of
a Federal program or policy (including the
negotiation, award, or administration of a
Federal contract, grant, loan, permit, or
license).
``(B) Exception.--The term `political intelligence
contact' does not include a communication that is made
by or to a representative of the media if the purpose
of the communication is gathering and disseminating
news and information to the public.
``(19) Political intelligence firm.--The term `political
intelligence firm' means a person or entity that has 1 or more
employees who are political intelligence consultants to a
client other than that person or entity.
``(20) Political intelligence consultant.--The term
`political intelligence consultant' means any individual who is
employed or retained by a client for financial or other
compensation for services that include one or more political
intelligence contacts.''.
(b) Registration Requirement.--Section 4 of the Lobbying Disclosure
Act of 1995 (2 U.S.C. 1603) is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) by inserting after ``whichever is
earlier,'' the following: ``or a political
intelligence consultant first makes a political
intelligence contact,''; and
(ii) by inserting after ``such lobbyist''
each place that term appears the following:
``or consultant'';
(B) in paragraph (2), by inserting after
``lobbyists'' each place that term appears the
following: ``or political intelligence consultants'';
and
(C) in paragraph (3)(A)--
(i) by inserting after ``lobbying
activities'' each place that term appears the
following: ``and political intelligence
activities''; and
(ii) in clause (i), by inserting after
``lobbying firm'' the following: ``or political
intelligence firm'';
(2) in subsection (b)--
(A) in paragraph (3), by inserting after ``lobbying
activities'' each place that term appears the
following: ``or political intelligence activities'';
(B) in paragraph (4)--
(i) in the matter preceding subparagraph
(A), by inserting after ``lobbying activities''
the following: ``or political intelligence
activities''; and
(ii) in subparagraph (C), by inserting
after ``lobbying activity'' the following: ``or
political intelligence activity'';
(C) in paragraph (5), by inserting after ``lobbying
activities'' each place that term appears the
following: ``or political intelligence activities'';
(D) in paragraph (6), by inserting after
``lobbyist'' each place that term appears the
following: ``or political intelligence consultant'';
and
(E) in the matter following paragraph (6), by
inserting ``or political intelligence activities''
after ``such lobbying activities'';
(3) in subsection (c)--
(A) in paragraph (1), by inserting after ``lobbying
contacts'' the following: ``or political intelligence
contacts''; and
(B) in paragraph (2)--
(i) by inserting after ``lobbying contact''
the following: ``or political intelligence
contact''; and
(ii) by inserting after ``lobbying
contacts'' the following: ``and political
intelligence contacts''; and
(4) in subsection (d), by inserting after ``lobbying
activities'' each place that term appears the following: ``or
political intelligence activities''.
(c) Reports by Registered Political Intelligence Consultants.--
Section 5 of the Lobbying Disclosure Act of 1995 (2 U.S.C. 1604) is
amended--
(1) in subsection (a), by inserting after ``lobbying
activities'' the following: ``and political intelligence
activities'';
(2) in subsection (b)--
(A) in paragraph (2)--
(i) in the matter preceding subparagraph
(A), by inserting after ``lobbying activities''
the following: ``or political intelligence
activities'';
(ii) in subparagraph (A)--
(I) by inserting after ``lobbyist''
the following: ``or political
intelligence consultant''; and
(II) by inserting after ``lobbying
activities'' the following: ``or
political intelligence activities'';
(iii) in subparagraph (B), by inserting
after ``lobbyists'' the following: ``and
political intelligence consultants''; and
(iv) in subparagraph (C), by inserting
after ``lobbyists'' the following: ``or
political intelligence consultants'';
(B) in paragraph (3)--
(i) by inserting after ``lobbying firm''
the following: ``or political intelligence
firm''; and
(ii) by inserting after ``lobbying
activities'' each place that term appears the
following: ``or political intelligence
activities''; and
(C) in paragraph (4), by inserting after ``lobbying
activities'' each place that term appears the
following: ``or political intelligence activities'';
and
(3) in subsection (d)(1), in the matter preceding
subparagraph (A), by inserting ``or a political intelligence
consultant'' after ``a lobbyist''.
(d) Disclosure and Enforcement.--Section 6(a) of the Lobbying
Disclosure Act of 1995 (2 U.S.C. 1605) is amended--
(1) in paragraph (3)(A), by inserting after ``lobbying
firms'' the following: ``, political intelligence consultants,
political intelligence firms,'';
(2) in paragraph (7), by striking ``or lobbying firm'' and
inserting ``lobbying firm, political intelligence consultant,
or political intelligence firm''; and
(3) in paragraph (8), by striking ``or lobbying firm'' and
inserting ``lobbying firm, political intelligence consultant,
or political intelligence firm''.
(e) Rules of Construction.--Section 8(b) of the Lobbying Disclosure
Act of 1995 (2 U.S.C. 1607(b)) is amended by striking ``or lobbying
contacts'' and inserting ``lobbying contacts, political intelligence
activities, or political intelligence contacts''.
(f) Identification of Clients and Covered Officials.--Section 14 of
the Lobbying Disclosure Act of 1995 (2 U.S.C. 1609) is amended--
(1) in subsection (a)--
(A) in the heading, by inserting ``or Political
Intelligence'' after ``Lobbying'';
(B) by inserting ``or political intelligence
contact'' after ``lobbying contact'' each place that
term appears; and
(C) in paragraph (2), by inserting ``or political
intelligence activity, as the case may be'' after
``lobbying activity'';
(2) in subsection (b)--
(A) in the heading, by inserting ``or Political
Intelligence'' after ``Lobbying'';
(B) by inserting ``or political intelligence
contact'' after ``lobbying contact'' each place that
term appears; and
(C) in paragraph (2), by inserting ``or political
intelligence activity, as the case may be'' after
``lobbying activity''; and
(3) in subsection (c), by inserting ``or political
intelligence contact'' after ``lobbying contact''.
(g) Annual Audits and Reports by Comptroller General.--Section 26
of the Lobbying Disclosure Act of 1995 (2 U.S.C. 1614) is amended--
(1) in subsection (a)--
(A) by inserting ``political intelligence firms,
political intelligence consultants,'' after ``lobbying
firms''; and
(B) by striking ``lobbying registrations'' and
inserting ``registrations'';
(2) in subsection (b)(1)(A), by inserting ``political
intelligence firms, political intelligence consultants,'' after
``lobbying firms''; and
(3) in subsection (c), by inserting ``or political
intelligence consultant'' after ``a lobbyist''.
SEC. 7. EFFECTIVE DATE.
Subject to section 5(b), this Act and the amendments made by this
Act shall take effect at the end of the 90-day period beginning on the
date of the enactment of this Act.
<all>
RE-REFERRAL - Mr. Bachus asked unanimous consent that H.R. 1148 be re-referred primarily to the Committee on Financial Services and additionally to the Committees on Agriculture, House Administration, the Judiciary, Ethics and Rules. Agreed to without objection.
Committee on Financial Services discharged.
Committee on Financial Services discharged.
Committee on Agriculture discharged.
Committee on Agriculture discharged.
Committee on House Administration discharged.
Committee on House Administration discharged.
Committee on Judiciary discharged.
Committee on Judiciary discharged.
Committee on Ethics discharged.
Committee on Ethics discharged.
Rereferred to the Committee on Financial Services, and in addition to the Committees on Agriculture, House Administration, the Judiciary, Ethics, and Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
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Rereferred to the Committee on Financial Services, and in addition to the Committees on Agriculture, House Administration, the Judiciary, Ethics, and Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Rereferred to the Committee on Financial Services, and in addition to the Committees on Agriculture, House Administration, the Judiciary, Ethics, and Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Rereferred to the Committee on Financial Services, and in addition to the Committees on Agriculture, House Administration, the Judiciary, Ethics, and Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Rereferred to the Committee on Financial Services, and in addition to the Committees on Agriculture, House Administration, the Judiciary, Ethics, and Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Rereferred to the Committee on Financial Services, and in addition to the Committees on Agriculture, House Administration, the Judiciary, Ethics, and Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on the Constitution.
Committee Hearings Held.
Motion to Discharge Committee filed by Mr. Walz (MN). Petition No: 112-3. (<a href="http://clerk.house.gov/112/lrc/pd/petitions/DisPet0003.xml ">Discharge petition</a> text with signatures.)