Capitol View: April 4, 2011 Archive

Walz bill would close insider trading loophole

Posted at 11:22 AM on April 4, 2011 by Catharine Richert
Filed under: MPR in D.C., U.S. House

Rep. Tim Walz is once again co-sponsoring legislation that would prevent members of Congress and their staff from engaging in insider trading.

People in the private sector are prohibited from using non-public information to inform decisions about buying and selling stock. Lawmakers' jobs frequently give them access to similar information, but absent a specific confidentiality agreement, it's unclear whether the same insider trading rules apply.

There are no clear-cut examples of members of Congress or staffers using confidential information to trade. But as support for their bill, sponsors usually point to an incident involving Tony Rudy, a top staffer for former House Speaker Tom Delay, who reportedly used his work computer to day trade.

Walz and New York Democrat Louise Slaughter are also concerned that members of Congress and their staff share confidential information that can be used to make stock decisions with outside firms

Among other things, Walz and Slaughter's bill would:

• Prohibit lawmakers, congressional staffers and Executive Branch staffers from using nonpublic information acquired on the job to trade stock.

• Prohibit government outsiders from using information obtained within Congress or the Executive Branch to trade stocks.

• Require lawmakers and congressional staffers to report the purchase, sale or exchange of stocks, bonds or commodity futures greater than $1,000 within 90 days.

Read more about the bill on Walz's website.