[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