II 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Stop Trading on Con5 gressional Knowledge Act of 2012’’ or the ‘‘STOCK Act’’. 

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1 SEC. 2. USE OF NONPUBLIC INFORMATION FOR PERSONAL 

2 BENEFIT PROHIBITED. 

3 The Congressional Accountability Act of 1995 (Pub4 lic Law 104–1; 2 U.S.C. 1301 et seq.) is amended by at 

5 the end the following: 

6 ‘‘TITLE VI—USE OF NONPUBLIC 

7 INFORMATION FOR PER8 SONAL BENEFIT PROHIBITED 

9 ‘‘SEC. 601. DEFINITION. 

10 ‘‘In this title— 

11 ‘‘(1) the term ‘Member of Congress’ means a 

12 member of the Senate or the House of Representa13 tives, a Delegate to the House of Representatives, 

14 and the Resident Commissioner from Puerto Rico; 

15 and 

16 ‘‘(2) the term ‘employee of Congress’ means— 

17 ‘‘(A) an employee of the Senate; and 

18 ‘‘(B) an employee of the House of Rep19 resentatives. 

20 ‘‘SEC. 602. GENERAL PROHIBITION. 

21 ‘‘No Member of Congress and no employee of Con22 gress shall use any nonpublic information derived from the 

23 individual’s position as a Member of Congress or employee 

24 of Congress, or gained from performance of the individ25 ual’s duties, for personal benefit. 

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1 ‘‘SEC. 603. IMPLEMENTING RULES. 

2 ‘‘The Select Committee on Ethics of the Senate and 

3 the Committee on Standards of Official Conduct of the 

4 House of Representatives shall issue rules or regulations 

5 to carry out the purposes of section 602. 

6 ‘‘SEC. 604. APPLICABILITY TO SECURITIES LAWS. 

7 ‘‘(a) IN GENERAL.— 

8 ‘‘(1) NOT EXEMPT.—Members of Congress and 

9 employees of Congress are not exempt from the pro10 hibitions arising under section 10(b) of the Securi11 ties Exchange Act of 1934 and Rule 10b–5 there12 under, including the insider trading prohibitions. 

13 ‘‘(2) DUTY.—For purposes of the insider trad14 ing prohibitions arising under section 10(b) of the 

15 Securities Exchange Act of 1934 and Rule 10b-5 

16 issued thereunder (or any successor to such Rule), 

17 section 602 affirms a duty arising from a relation18 ship of trust and confidence owed by each Member 

19 of Congress and each employee of Congress to Con20 gress, the United States Government, and the citi21 zens of the United States. 

22 ‘‘(b) RULEMAKING AUTHORITY.—The Securities and 

23 Exchange Commission may issue such rules or regulations 

24 as the Commission determines are necessary or appro25 priate to implement subsection (a) or to otherwise ensure 

26 that Members of Congress and employees of Congress are 

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1 subject to the insider trading prohibitions that apply gen2 erally. 

3 ‘‘SEC. 605. APPROPRIATE PUNITIVE, DISCIPLINARY, AND 

4 OTHER REMEDIAL ACTION. 

5 ‘‘A Member of Congress or an employee of Congress 

6 who violates the prohibition under section 602 shall be 

7 subject to appropriate punitive, disciplinary, and other re8 medial action in accordance with any applicable laws, reso9 lutions, rules, or regulations. 

10 ‘‘SEC. 606. RULE OF CONSTRUCTION. 

11 ‘‘Nothing in this title shall be construed to be in dero12 gation of existing obligations, duties and functions of a 

13 Member of Congress or an employee of Congress or to 

14 limit or otherwise alter the securities laws, the authority 

15 of the Securities and Exchange Commission under such 

16 laws, or other laws of the United States.’’. 

17 SEC. 3. TECHNICAL, CONFORMING, AND CLERICAL AMEND18 MENTS. 

19 The Congressional Accountability Act of 1995 is 

20 amended— 

21 (1) in section 1(b) by inserting, after the item 

22 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. 

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‘‘Sec. 605. Appropriate punitive, disciplinary, and other remedial action. 

‘‘Sec. 606. Rule of construction.’’; 

1 and 

2 (2) in section 413 (2 U.S.C. 1413) by striking 

3 ‘‘408’’ and inserting ‘‘408, or to bring a judicial pro4 ceeding to enforce the prohibition under section 

5 602,’’. 

6 SEC. 4. CONFORMING CHANGES TO THE COMMODITY EX7 CHANGE ACT. 

8 Section 4c(a) of the Commodity Exchange Act (7 

9 U.S.C. 6c(a)) is amended by— 

10 (1) inserting ‘‘or any Member of Congress or 

11 congressional employee’’ after ‘‘Federal Govern12 ment,’’— 

13 (A) the first time it appears in paragraph 

14 (3); 

15 (B) the first time it appears in paragraph 

16 (4)(A); 

17 (C) in paragraph (4)(B); and 

18 (D) in paragraph clause (4)(C)(iii); 

19 (2) inserting ‘‘or by Congress’’— 

20 (A) in paragraph (3), before ‘‘in a man21 ner’’; 

22 (B) in paragraph (4)(A), before ‘‘in a man23 ner’’; and 

24 (C) in paragraph (4)(C)— 

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1 (i) before ‘‘that may affect’’ and 

2 (ii) before ‘‘in a manner’’ ; 

3 (3) in paragraphs (3) and (4)(A), inserting 

4 ‘‘Member,’’ after ‘‘position of the’’; and 

5 (4) in paragraph (4)(C)(iii), inserting ‘‘to Con6 gress’’ after ‘‘Federal Government’’. 

7 SEC. 5. PROMPT REPORTING OF FINANCIAL TRANS8 ACTIONS. 

9 (a) REPORTING REQUIREMENT.—Section 101 of the 

10 Ethics in Government Act is amended by adding at the 

11 end the following subsection: 

12 ‘‘(j) Within 30 days after any transaction required 

13 to be reported under subparagraph 102(a)(5)(B) of this 

14 Act, a Member of Congress or officer or employee of Con15 gress shall file a report of the transaction.’’. 

16 (b) EFFECTIVE DATE.—The amendment made by 

17 subsection (a) shall apply to transactions occurring on or 

18 after the date that is 90 days after the date of enactment 

19 of this Act. 

20 SEC. 6. REPORT ON POLITICAL INTELLIGENCE ACTIVITIES. 

21 (a) REPORT.— 

22 (1) IN GENERAL.—Not later than 12 months 

23 after the date of enactment of this Act, the Comp24 troller General of the United States, in consultation 

25 with the Congressional Research Service, shall submstockstill on DSK4VPTVN1PROD with BILLS

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1 mit to the Committee on Homeland Security and 

2 Governmental Affairs of the Senate and the Com3 mittee on Oversight and Government Reform of the 

4 House of Representatives a report on the role of po5 litical intelligence in the financial markets. 

6 (2) CONTENTS.—The report required by this 

7 section shall include a discussion of— 

8 (A) what is known about the prevalence of 

9 the sale of political intelligence and the extent 

10 to which investors rely on such information; 

11 (B) what is known about the effect that 

12 the sale of political intelligence may have on the 

13 financial markets; 

14 (C) the extent to which information which 

15 is being sold would be considered non-public in16 formation; 

17 (D) the legal and ethical issues that may 

18 be raised by the sale of political intelligence; 

19 (E) any benefits from imposing disclosure 

20 requirements on those who engage in political 

21 intelligence activities; and 

22 (F) any legal and practical issues that may 

23 be raised by the imposition of disclosure re24 quirements on those who engage in political in25 telligence activities. 

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1 (b) DEFINITION.—For purposes of this section, the 

2 term ‘‘political intelligence’’ shall mean information that 

3 is— 

4 (1) derived by a seller from direct communica5 tions with executive branch and legislative branch of6 ficials; and 

7 (2) provided in exchange for financial com8 pensation to a client who intends, and who is known 

9 by the seller to intend, to use the information to in10 form investment decisions. 

11 SEC. 7. PUBLIC FILING AND DISCLOSURE OF FINANCIAL 

12 DISCLOSURE FORMS OF MEMBERS OF CON13 GRESS AND CONGRESSIONAL STAFF. 

14 (a) PUBLIC, ON-LINE DISCLOSURE OF FINANCIAL

15 DISCLOSURE FORMS OF MEMBERS OF CONGRESS AND

16 CONGRESSIONAL STAFF.— 

17 (1) IN GENERAL.—Not later than August 31, 

18 2012, or 90 days after the date of enactment of this 

19 Act, whichever is later, the Secretary of the Senate 

20 and the Sergeant at Arms of the Senate, and the 

21 Clerk of the House of Representatives, shall ensure 

22 that financial disclosure forms filed by Members of 

23 Congress, officers of the House and Senate, can24 didates for Congress, and employees of the Senate 

25 and the House of Representatives in calendar year 

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1 2012 and in subsequent years pursuant to title I of 

2 the Ethics in Government Act of 1978 are made 

3 available to the public on the respective official 

4 websites of the Senate and the House of Representa5 tives not later than 30 days after such forms are 

6 filed. 

7 (2) EXTENSIONS.—The existing protocol allow8 ing for extension requests for financial disclosures 

9 shall be retained. Notices of extension for financial 

10 disclosure shall be made available electronically 

11 under this subsection along with its related disclo12 sure. 

13 (3) REPORTING TRANSACTIONS.—In the case of 

14 a transaction disclosure required by section 101(j) of 

15 the Ethics in Government Act of 1978, as added by 

16 this Act, such disclosures shall be filed not later 

17 than 30 days after the transaction. Notices of exten18 sion for transaction disclosure shall be made avail19 able electronically under this subsection along with 

20 its related disclosure. 

21 (4) EXPIRATION.—The requirements of this 

22 subsection shall expire upon implementation of the 

23 public disclosure system established under subsection 

24 (b). 

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1 (b) ELECTRONIC FILING AND ON-LINE PUBLIC

2 AVAILABILITY OF FINANCIAL DISCLOSURE FORMS OF

3 MEMBERS OF CONGRESS, OFFICERS OF THE HOUSE AND

4 SENATE, AND CONGRESSIONAL STAFF.— 

5 (1) IN GENERAL.—Subject to paragraph (6) 

6 and not later than 18 months after the date of en7 actment of this Act, the Secretary of the Senate and 

8 the Sergeant at Arms of the Senate and the Clerk 

9 of the House of Representatives shall develop sys10 tems to enable— 

11 (A) electronic filing of reports received by 

12 them pursuant to section 103(h)(1)(A) of title 

13 1 of the Ethics in Government Act of 1978; and 

14 (B) public access to financial disclosure re15 ports filed by Members of Congress, Officers of 

16 the House and Senate, candidates for Congress, 

17 and employees of the Senate and House of Rep18 resentatives, as well as reports of a transaction 

19 disclosure required by section 101(j) of the Eth20 ics in Government Act of 1978, as added by 

21 this Act, notices of extensions, amendments and 

22 blind trusts, pursuant to title I of the Ethics in 

23 Government Act of 1978 through databases 

24 that— 

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1 (i) are maintained on the official 

2 websites of the House of Representatives 

3 and the Senate; and 

4 (ii) allow the public to search, sort 

5 and download data contained in the re6 ports. 

7 (2) LOGIN.—No login shall be required to 

8 search or sort the data contained in the reports 

9 made available by this subsection. A login protocol 

10 with name of user shall be utilized by a person 

11 downloading data contained in the reports. For pur12 poses of filings under this section, section 105(b)(2) 

13 of the Ethics in Government Act of 1978 does not 

14 apply. 

15 (3) PUBLIC AVAILABILITY.—Pursuant to sec16 tion 105(b)(1) of title 1 of the Ethics in Government 

17 Act of 1978, electronic availability on the official 

18 websites of the Senate and the House of Representa19 tives under this subsection shall be deemed to have 

20 met the public availability requirement. 

21 (4) FILERS COVERED.—Individuals required 

22 under the Ethics in Government Act of 1978 or the 

23 Senate Rules to file financial disclosure reports with 

24 the Secretary of the Senate or the Clerk of the 

25 House shall file reports electronically using the sysmstockstill on DSK4VPTVN1PROD with BILLS

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1 tems developed by the Secretary of the Senate and 

2 the Clerk of the House. 

3 (5) EXTENSIONS.—The existing protocol allow4 ing for extension requests for financial disclosures 

5 shall be retained for purposes of this subsection. No6 tices of extension for financial disclosure shall be 

7 made available electronically under this subsection 

8 along with its related disclosure. 

9 (6) ADDITIONAL TIME.—The requirements of 

10 this subsection may be implemented after the date 

11 provided in paragraph (1) if the Secretary of the 

12 Senate or the Clerk of the House identify in writing 

13 to relevant congressional committees an additional 

14 amount of time needed. 

15 (c) RECORDKEEPING.—Section 105(d) of the Ethics 

16 in Government Act of 1978 is amended to read as follows: 

17 ‘‘(d)(1) Any report filed with or transmitted to an 

18 agency or supervising ethics office or to the Clerk of the 

19 House of Representatives or the Secretary of the Senate 

20 pursuant to this title shall be retained by such agency or 

21 office or by the Clerk or the Secretary of the Senate, as 

22 the case may be. 

23 ‘‘(2) Such report shall be made available to the pub24 lic— 

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1 ‘‘(A) in the case of a Member of Congress until 

2 a date that is 6 years from the date the individual 

3 ceases to be a Member of Congress; and 

4 ‘‘(B) in the case of all other reports filed pursu5 ant to this title, for a period of six years after re6 ceipt of the report. 

7 ‘‘(3) After the relevant time period identified under 

8 paragraph (2), the report shall be destroyed unless needed 

9 in an ongoing investigation, except that in the case of an 

10 individual who filed the report pursuant to section 101(b) 

11 and was not subsequently confirmed by the Senate, or who 

12 filed the report pursuant to section 101(c) and was not 

13 subsequently elected, such reports shall be destroyed 1 

14 year after the individual either is no longer under consid15 eration by the Senate or is no longer a candidate for nomi16 nation or election to the Office of President, Vice Presi17 dent, or as a Member of Congress, unless needed in an 

18 ongoing investigation or inquiry.’’. 

19 SEC. 8. FEDERAL EMPLOYEES. 

20 (a) GENERAL PROHIBITION.—No Federal employee 

21 shall use any nonpublic information derived from the indi22 vidual’s position as a Federal employee, or gained from 

23 performance of the individual’s duties, for personal ben24 efit. 

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1 (b) IMPLEMENTING RULES.—Each office, officer, or 

2 entity responsible for administering title I of the Ethics 

3 in Government Act (5 U.S.C. App.) under section 111 of 

4 that Act shall issue rules or regulations to carry out the 

5 purposes of subsection (a) that shall be applicable to Fed6 eral employees subject to administration by the office, offi7 cer, or entity under that section 111. 

8 (c) APPLICABILITY TO SECURITIES LAWS.— 

9 (1) IN GENERAL.—For the purposes of the in10 sider trading prohibitions arising under section 

11 10(b) of the Securities Exchange Act of 1934 and 

12 Rule 10b–5 thereunder, the prohibition set forth in 

13 subsection (a) states a duty of trust and confidence 

14 of each Federal employee to the United States Gov15 ernment and the citizens of the United States. 

16 (2) RULEMAKING AUTHORITY.—The Securities 

17 and Exchange Commission may issue such rules or 

18 regulations as the Commission determines are nec19 essary or appropriate to implement subsection (a) or 

20 to otherwise ensure that Federal employees are sub21 ject to the insider trading prohibitions that apply 

22 generally. 

23 (d) APPROPRIATE PUNITIVE, DISCIPLINARY, AND

24 OTHER REMEDIAL ACTION.—A Federal employee who 

25 violates the prohibition under subsection (a) shall be submstockstill on DSK4VPTVN1PROD with BILLS

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1 ject to appropriate punitive, disciplinary, and other reme2 dial action in accordance with any applicable laws, resolu3 tions, rules, or regulations. 

4 (e) FEDERAL EMPLOYEE.—In this section, the term 

5 ‘‘Federal employee’’— 

6 (1) has the meaning given the term ‘‘employee’’ 

7 under section 2105 of title 5, United States Code; 

8 and 

9 (2) includes— 

10 (A) the President; 

11 (B) the Vice President; 

12 (C) a Member of Congress, as defined 

13 under section 2106 of title 5, United States 

14 Code; 

15 (D) a judge or justice of the United 

16 States; and 

17 (E) an employee of the United States 

18 Postal Service or the Postal Regulatory Com19 mission. 

20 (f) RULE OF CONSTRUCTION.—Nothing in this sec21 tion shall be construed to be in derogation of existing laws, 

22 regulations, or ethical obligations of Federal employees. 

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Calendar No. 301 

112TH CONGRESS 

2D SESSION S. 2038 

A BILL 

To prohibit Members of Congress and employees of 

benefit, and for other purposes. rived from their official positions for personal Congress from using nonpublic information deJANUARY 26, 2012 

Read twice and placed on the calendar 

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