What Is the STOCK Act?
The Stop Trading On Congressional Knowledge Act, or STOCK Act, was a bipartisan bill signed into law Apr. 4, 2012 by President Barack Obama preventing members of Congress from trading stocks based on nonpublic information.
Understanding the STOCK Act
The Stop Trading on Congressional Knowledge (STOCK) Act stated that congressional members and staff were prohibited from using nonpublic information obtained due to their positions in government to turn a profit.
Additionally, the STOCK Act demanded members of Congress and other high-ranking government officials increase transparency by using financial disclosures. This increased transparency includes required reporting of certain financial gains within 45 days of receipt and disclosure of home mortgage terms. It also forbids access to Initial Public Offerings (IPO’s) and bans bonuses for senior executive members of the boards of Fannie Mae and Freddie Mac.
The STOCK Act was an amendment to the Ethics in Government Act of 1978 which allowed for electronic reporting and an online publication of public financial disclosure information. The financials must be accessible through agency websites and data bases, and contain features for searching and sorting. Failing to adhere to the rules of the act could result in the forfeiture of congressional pensions.
Government Employees and Ethics Oversight
In July 2018, the United States Commerce Secretary Wilbur Ross found himself in trouble for failing to divest himself from investments that were potentially in violation of criminal conflict of interest laws. Although the secretary stated that the failure was an error, and not done with the intention of committing misconduct, watchdog groups were quick to point out that this oversight was suspicious.
Secretary Ross has stated repeatedly since the discovery of the oversight that he will divest immediately. An internal Commerce Department investigation declared that there was no indication of willful wrongdoing. Mr. Ross does not currently face charges or have any intention of stepping down from his position.
Despite these facts, many have spoken out against Mr. Ross and called for an additional investigation, stating that these stocks have compromised not only his ability to act in America’s best interests, but may have also broken the law. Senator Ron Wyden of Oregon is calling for an additional Justice Department investigation.
Mr. Ross isn’t the only member of the Trump administration who has been in the news over assets and allegations of ethics violations. Most recently Scott Pruitt, the former chief of the Environmental Protection Agency (EPA) resigned after questions about his improper allocation of funds had arisen. Also, Tom Price, the former Secretary of Health and Human Services (HHS) resigned after questions arose about excessive travel expenses.