Stop Trading On Congressional Knowledge Act - STOCK Act

AAA

DEFINITION of 'Stop Trading On Congressional Knowledge Act - STOCK Act'

A bipartisan bill signed into law Apr. 4, 2012 by President Barack Obama that prevents members of congress from trading stocks based on nonpublic information gathered on Capitol Hill. The Stop Trading on Congressional Knowledge (STOCK) Act elucidates that congressional members and staff owe a duty to United States citizens not to misappropriate nonpublic information to make a profit. In addition to banning insider trading for members and Congressional staff, the STOCK Act provides for increases transparency in financial disclosure reporting, and requires members of Congress and government employees to report certain investment transactions within 45 days.

INVESTOPEDIA EXPLAINS 'Stop Trading On Congressional Knowledge Act - STOCK Act'

The STOCK Act amended the Ethics in Government Act of 1978 to require electronic reporting and online availability of public financial disclosure information. This information must be made available on agency web sites and through databases that can be searched and sorted.

According to the Act, a member of Congress who commits one of several corruption offenses while serving as an elected official will be required to forfeit his or her federal pension. The STOCK Act expands forfeiture to apply to misconduct by members committed in other federal, state and local elected offices and adds insider trading as a crime for which forfeiture will be required.

The STOCK Act also requires disclosure of personal mortgage terms, bans special access to initial public offerings and bans bonuses for Fannie Mae and Freddie Mac senior executives.

RELATED TERMS
  1. Congress

    The legislative branch of the United States government. It is ...
  2. Insider

    A director or senior officer of a company, as well as any person ...
  3. Insider Trading

    The buying or selling of a security by someone who has access ...
  4. Sarbanes-Oxley Act Of 2002 - SOX

    An act passed by U.S. Congress in 2002 to protect investors from ...
  5. Bullet Dodging

    A form of option granting in which the award of options is delayed ...
  6. Licensed For Reinsurance Only

    A license that allows a company to engage in services related ...
Related Articles
  1. Markets

    What Investors Can Learn From Insider ...

  2. Economics

    Defining Illegal Insider Trading

  3. Professionals

    Standards And Ethics For Financial Professionals

  4. Markets

    Infamous Insider Traders

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center