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. Bullet Dodging

    A form of option granting in which the award of options is delayed ...
  4. Insider Trading

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

    An act passed by U.S. Congress in 2002 to protect investors from ...
  6. TSA Pre

    This program allows travelers deemed low-risk by the Transportation ...
Related Articles
  1. Markets

    What Investors Can Learn From Insider Trading

    Some insider trading is actually legal - and can be extremely telling for investors.
  2. Economics

    Defining Illegal Insider Trading

    The better you understand why insider trading can be criminal, the better you'll understand how the market works.
  3. Professionals

    Standards And Ethics For Financial Professionals

    Scandals and fraud have given financial professionals a black eye. Learn how to avoid typical ethical dilemmas.
  4. Markets

    Infamous Insider Traders

    Check out these bizarre insider trading cases that helped define the SEC's laws against it.
  5. Investing Basics

    Policing The Securities Market: An Overview Of The SEC

    Find out how this regulatory body protects the rights of investors.
  6. Investing

    What exactly is insider trading?

    An "insider" is any person who possesses at least one of the following: 1) access to valuable non-public information about a corporation (this makes a company's directors and high-level executives ...
  7. Personal Finance

    How Minimum Wage Impacts Unemployment

    We explain how the minimum wage affects unemployment, public assistance, and the economy overall.
  8. Bonds & Fixed Income

    How Diaspora Bonds Work

    Developing and emerging nations with sizable populations living overseas are using diaspora bonds to raise financing from emigrants.
  9. Economics

    Who sets fiscal policy, the president or congress?

    Discover how fiscal policy is set in the United States, including how all three branches of government can affect a given policy proposal.
  10. Investing

    What Happened To Obama’s Amnesty Bill?

    The sweeping Republican majorities were supposed to trigger change, but now they are preparing to embrace the Obama immigration policy.

You May Also Like

Hot Definitions
  1. Command Economy

    A system where the government, rather than the free market, determines what goods should be produced, how much should be ...
  2. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  3. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  4. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  5. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  6. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
Trading Center