[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 2038 Placed on Calendar Senate (PCS)]
Calendar No. 301
112th CONGRESS
2d Session
S. 2038
To prohibit Members of Congress and employees of Congress from using
nonpublic information derived from their official positions for
personal benefit, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 26, 2012
Mr. Lieberman, from the Committee on Homeland Security and Governmental
Affairs, reported the following original bill; which was read twice and
placed on the calendar
_______________________________________________________________________
A BILL
To prohibit Members of Congress and employees of Congress from using
nonpublic information derived from their official positions for
personal benefit, 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 of 2012'' or the ``STOCK Act''.
SEC. 2. USE OF NONPUBLIC INFORMATION FOR PERSONAL BENEFIT PROHIBITED.
The Congressional Accountability Act of 1995 (Public Law 104-1; 2
U.S.C. 1301 et seq.) is amended by at the end the following:
``TITLE VI--USE OF NONPUBLIC INFORMATION FOR PERSONAL BENEFIT
PROHIBITED
``SEC. 601. DEFINITION.
``In this title--
``(1) the term `Member of Congress' means a member of the
Senate or the House of Representatives, a Delegate to the House
of Representatives, and the Resident Commissioner from Puerto
Rico; and
``(2) the term `employee of Congress' means--
``(A) an employee of the Senate; and
``(B) an employee of the House of Representatives.
``SEC. 602. GENERAL PROHIBITION.
``No Member of Congress and no employee of Congress shall use any
nonpublic information derived from the individual's position as a
Member of Congress or employee of Congress, or gained from performance
of the individual's duties, for personal benefit.
``SEC. 603. IMPLEMENTING RULES.
``The Select Committee on Ethics of the Senate and the Committee on
Standards of Official Conduct of the House of Representatives shall
issue rules or regulations to carry out the purposes of section 602.
``SEC. 604. APPLICABILITY TO SECURITIES LAWS.
``(a) In General.--
``(1) Not exempt.--Members of Congress and employees of
Congress are not exempt from the prohibitions arising under
section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 thereunder, including the insider trading prohibitions.
``(2) Duty.--For purposes of the insider trading
prohibitions arising under section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 issued thereunder (or any
successor to such Rule), section 602 affirms a duty arising
from a relationship of trust and confidence owed by each Member
of Congress and each employee of Congress to Congress, the
United States Government, and the citizens of the United
States.
``(b) Rulemaking Authority.--The Securities and Exchange Commission
may issue such rules or regulations as the Commission determines are
necessary or appropriate to implement subsection (a) or to otherwise
ensure that Members of Congress and employees of Congress are subject
to the insider trading prohibitions that apply generally.
``SEC. 605. APPROPRIATE PUNITIVE, DISCIPLINARY, AND OTHER REMEDIAL
ACTION.
``A Member of Congress or an employee of Congress who violates the
prohibition under section 602 shall be subject to appropriate punitive,
disciplinary, and other remedial action in accordance with any
applicable laws, resolutions, rules, or regulations.
``SEC. 606. RULE OF CONSTRUCTION.
``Nothing in this title shall be construed to be in derogation of
existing obligations, duties and functions of a Member of Congress or
an employee of Congress or to limit or otherwise alter the securities
laws, the authority of the Securities and Exchange Commission under
such laws, or other laws of the United States.''.
SEC. 3. TECHNICAL, CONFORMING, AND CLERICAL AMENDMENTS.
The Congressional Accountability Act of 1995 is amended--
(1) in section 1(b) by inserting, after the item relating
to section 509, the following:
``TITLE VI--USE OF NONPUBLIC INFORMATION FOR PERSONAL BENEFIT
PROHIBITED
``Sec. 601. Definition.
``Sec. 602. General prohibition.
``Sec. 603. Implementing rules.
``Sec. 604. Applicability to securities laws.
``Sec. 605. Appropriate punitive, disciplinary, and other remedial
action.
``Sec. 606. Rule of construction.'';
and
(2) in section 413 (2 U.S.C. 1413) by striking ``408'' and
inserting ``408, or to bring a judicial proceeding to enforce
the prohibition under section 602,''.
SEC. 4. CONFORMING CHANGES TO THE COMMODITY EXCHANGE ACT.
Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) is
amended by--
(1) inserting ``or any Member of Congress or congressional
employee'' after ``Federal Government,''--
(A) the first time it appears in paragraph (3);
(B) the first time it appears in paragraph (4)(A);
(C) in paragraph (4)(B); and
(D) in paragraph clause (4)(C)(iii);
(2) inserting ``or by Congress''--
(A) in paragraph (3), before ``in a manner'';
(B) in paragraph (4)(A), before ``in a manner'';
and
(C) in paragraph (4)(C)--
(i) before ``that may affect'' and
(ii) before ``in a manner'' ;
(3) in paragraphs (3) and (4)(A), inserting ``Member,''
after ``position of the''; and
(4) in paragraph (4)(C)(iii), inserting ``to Congress''
after ``Federal Government''.
SEC. 5. PROMPT REPORTING OF FINANCIAL TRANSACTIONS.
(a) Reporting Requirement.--Section 101 of the Ethics in Government
Act is amended by adding at the end the following subsection:
``(j) Within 30 days after any transaction required to be reported
under subparagraph 102(a)(5)(B) of this Act, a Member of Congress or
officer or employee of Congress shall file a report of the
transaction.''.
(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 enactment of this Act.
SEC. 6. REPORT ON POLITICAL INTELLIGENCE ACTIVITIES.
(a) Report.--
(1) In general.--Not later than 12 months after the date of
enactment of this Act, the Comptroller General of the United
States, in consultation with the Congressional Research
Service, shall submit to the Committee on Homeland Security and
Governmental Affairs of the Senate and the Committee on
Oversight and Government Reform of the House of Representatives
a report on the role of political intelligence in the financial
markets.
(2) Contents.--The report required by this section shall
include a discussion of--
(A) what is known about the prevalence of the sale
of political intelligence and the extent to which
investors rely on such information;
(B) what is known about the effect that the sale of
political intelligence may have on the financial
markets;
(C) the extent to which information which is being
sold would be considered non-public information;
(D) the legal and ethical issues that may be raised
by the sale of political intelligence;
(E) any benefits from imposing disclosure
requirements on those who engage in political
intelligence activities; and
(F) any legal and practical issues that may be
raised by the imposition of disclosure requirements on
those who engage in political intelligence activities.
(b) Definition.--For purposes of this section, the term ``political
intelligence'' shall mean information that is--
(1) derived by a seller from direct communications with
executive branch and legislative branch officials; and
(2) provided in exchange for financial compensation to a
client who intends, and who is known by the seller to intend,
to use the information to inform investment decisions.
SEC. 7. PUBLIC FILING AND DISCLOSURE OF FINANCIAL DISCLOSURE FORMS OF
MEMBERS OF CONGRESS AND CONGRESSIONAL STAFF.
(a) Public, On-line Disclosure of Financial Disclosure Forms of
Members of Congress and Congressional Staff.--
(1) In general.--Not later than August 31, 2012, or 90 days
after the date of enactment of this Act, whichever is later,
the Secretary of the Senate and the Sergeant at Arms of the
Senate, and the Clerk of the House of Representatives, shall
ensure that financial disclosure forms filed by Members of
Congress, officers of the House and Senate, candidates for
Congress, and employees of the Senate and the House of
Representatives in calendar year 2012 and in subsequent years
pursuant to title I of the Ethics in Government Act of 1978 are
made available to the public on the respective official
websites of the Senate and the House of Representatives not
later than 30 days after such forms are filed.
(2) Extensions.--The existing protocol allowing for
extension requests for financial disclosures shall be retained.
Notices of extension for financial disclosure shall be made
available electronically under this subsection along with its
related disclosure.
(3) Reporting transactions.--In the case of a transaction
disclosure required by section 101(j) of the Ethics in
Government Act of 1978, as added by this Act, such disclosures
shall be filed not later than 30 days after the transaction.
Notices of extension for transaction disclosure shall be made
available electronically under this subsection along with its
related disclosure.
(4) Expiration.--The requirements of this subsection shall
expire upon implementation of the public disclosure system
established under subsection (b).
(b) Electronic Filing and On-line Public Availability of Financial
Disclosure Forms of Members of Congress, Officers of the House and
Senate, and Congressional Staff.--
(1) In general.--Subject to paragraph (6) and not later
than 18 months after the date of enactment of this Act, the
Secretary of the Senate and the Sergeant at Arms of the Senate
and the Clerk of the House of Representatives shall develop
systems to enable--
(A) electronic filing of reports received by them
pursuant to section 103(h)(1)(A) of title 1 of the
Ethics in Government Act of 1978; and
(B) public access to financial disclosure reports
filed by Members of Congress, Officers of the House and
Senate, candidates for Congress, and employees of the
Senate and House of Representatives, as well as reports
of a transaction disclosure required by section 101(j)
of the Ethics in Government Act of 1978, as added by
this Act, notices of extensions, amendments and blind
trusts, pursuant to title I of the Ethics in Government
Act of 1978 through databases that--
(i) are maintained on the official websites
of the House of Representatives and the Senate;
and
(ii) allow the public to search, sort and
download data contained in the reports.
(2) Login.--No login shall be required to search or sort
the data contained in the reports made available by this
subsection. A login protocol with name of user shall be
utilized by a person downloading data contained in the reports.
For purposes of filings under this section, section 105(b)(2)
of the Ethics in Government Act of 1978 does not apply.
(3) Public availability.--Pursuant to section 105(b)(1) of
title 1 of the Ethics in Government Act of 1978, electronic
availability on the official websites of the Senate and the
House of Representatives under this subsection shall be deemed
to have met the public availability requirement.
(4) Filers covered.--Individuals required under the Ethics
in Government Act of 1978 or the Senate Rules to file financial
disclosure reports with the Secretary of the Senate or the
Clerk of the House shall file reports electronically using the
systems developed by the Secretary of the Senate and the Clerk
of the House.
(5) Extensions.--The existing protocol allowing for
extension requests for financial disclosures shall be retained
for purposes of this subsection. Notices of extension for
financial disclosure shall be made available electronically
under this subsection along with its related disclosure.
(6) Additional time.--The requirements of this subsection
may be implemented after the date provided in paragraph (1) if
the Secretary of the Senate or the Clerk of the House identify
in writing to relevant congressional committees an additional
amount of time needed.
(c) Recordkeeping.--Section 105(d) of the Ethics in Government Act
of 1978 is amended to read as follows:
``(d)(1) Any report filed with or transmitted to an agency or
supervising ethics office or to the Clerk of the House of
Representatives or the Secretary of the Senate pursuant to this title
shall be retained by such agency or office or by the Clerk or the
Secretary of the Senate, as the case may be.
``(2) Such report shall be made available to the public--
``(A) in the case of a Member of Congress until a date that
is 6 years from the date the individual ceases to be a Member
of Congress; and
``(B) in the case of all other reports filed pursuant to
this title, for a period of six years after receipt of the
report.
``(3) After the relevant time period identified under paragraph
(2), the report shall be destroyed unless needed in an ongoing
investigation, except that in the case of an individual who filed the
report pursuant to section 101(b) and was not subsequently confirmed by
the Senate, or who filed the report pursuant to section 101(c) and was
not subsequently elected, such reports shall be destroyed 1 year after
the individual either is no longer under consideration by the Senate or
is no longer a candidate for nomination or election to the Office of
President, Vice President, or as a Member of Congress, unless needed in
an ongoing investigation or inquiry.''.
SEC. 8. FEDERAL EMPLOYEES.
(a) General Prohibition.--No Federal employee shall use any
nonpublic information derived from the individual's position as a
Federal employee, or gained from performance of the individual's
duties, for personal benefit.
(b) Implementing Rules.--Each office, officer, or entity
responsible for administering title I of the Ethics in Government Act
(5 U.S.C. App.) under section 111 of that Act shall issue rules or
regulations to carry out the purposes of subsection (a) that shall be
applicable to Federal employees subject to administration by the
office, officer, or entity under that section 111.
(c) Applicability to Securities Laws.--
(1) In general.--For the purposes of the insider trading
prohibitions arising under section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 thereunder, the prohibition
set forth in subsection (a) states a duty of trust and
confidence of each Federal employee to the United States
Government and the citizens of the United States.
(2) Rulemaking authority.--The Securities and Exchange
Commission may issue such rules or regulations as the
Commission determines are necessary or appropriate to implement
subsection (a) or to otherwise ensure that Federal employees
are subject to the insider trading prohibitions that apply
generally.
(d) Appropriate Punitive, Disciplinary, and Other Remedial
Action.--A Federal employee who violates the prohibition under
subsection (a) shall be subject to appropriate punitive, disciplinary,
and other remedial action in accordance with any applicable laws,
resolutions, rules, or regulations.
(e) Federal Employee.--In this section, the term ``Federal
employee''--
(1) has the meaning given the term ``employee'' under
section 2105 of title 5, United States Code; and
(2) includes--
(A) the President;
(B) the Vice President;
(C) a Member of Congress, as defined under section
2106 of title 5, United States Code;
(D) a judge or justice of the United States; and
(E) an employee of the United States Postal Service
or the Postal Regulatory Commission.
(f) Rule of Construction.--Nothing in this section shall be
construed to be in derogation of existing laws, regulations, or ethical
obligations of Federal employees.
Calendar No. 301
112th CONGRESS
2d Session
S. 2038
_______________________________________________________________________
A BILL
To prohibit Members of Congress and employees of Congress from using
nonpublic information derived from their official positions for
personal benefit, and for other purposes.
_______________________________________________________________________
January 26, 2012
Read twice and placed on the calendar