Washington (CNN) – The U.S. House on Friday eliminated a key requirement of the insider trading law for most federal employees, passing legislation exempting these workers, including congressional staff, from a rule scheduled to take effect next week that mandated online posting of financial transactions.
Aides to lawmakers insisted the changes were needed to avoid potential security risks to federal employees by revealing personal information.
The House vote followed similar action by the Senate Thursday. The votes were done with little notice and came at a time when most people were paying attention to the Senate’s work on high profile issues like guns and immigration.
One advocacy group pushing for greater government transparency blasted the move, saying it “guts” the law.
“Not only does the change undermine the intent of the original bill to ensure government insiders are not profiting from non-public information, it sets an extraordinarily dangerous precedent suggesting that any risks stem not from information being public but from public information being online,” Lisa Rosenberg of the Sunlight Foundation wrote in a statement,
Lisa Rosenberg
Government Affairs Consultant
Lisa Rosenberg is Sunlight’s Government Affairs Consultant, lobbying Congress to make legislative changes to improve transparency in government. She has extensive experience in the legislative branch, having worked for many years on and off Capitol Hill. As a Legislative Assistant for Senator John Kerry, Lisa advised the senator on issues relating to technology, consumer protection, campaign finance reform and judicial nominations. As Counsel for the Senate Governmental Affairs Committee’s Special Investigation into campaign finance irregularities, Lisa investigated illegal and improper campaign finance activities during the 1996 federal election and coordinated hearings for Ranking Member John Glenn. Lisa’s work off Capitol Hill includes her work as Congressional Liaison for the Legal Services Corporation (LSC), a federally funded nonprofit corporation providing civil legal assistance for the poor. As the Director of the FEC Watch Project at the Center for Responsive Politics, Lisa testified before the Senate Rules Committee on campaign finance reform issues and matters related to the Federal Election Commission.
This isn’t the first time the new insider trading law, called the STOCK (Stop Trading on Congressional Knowledge) Act has been caught up in controversy.
In July 2012, CNN exposed a loophole in the law that could have allowed some family members of lawmakers to potentially profit from insider information. Because of CNN”s investigation both the House and the Senate passed legislation to clarify that the law applied to family members of all members of Congress.
The STOCK Act required that in addition to members of Congress, both executive branch employees and senior congressional aides also needed to report their stock trades regularly and post them online.
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