The Senate Ethics Committee today began informing Members of the new requirements set by a recently enacted law designed to curb Congressional trading on insider knowledge.
Chairman Barbara Boxer (D-Calif.) and Vice Chairman Johnny Isakson (R-Ga.) sent a “Dear Colleague” letter to Members outlining the rules imposed by the Stop Trading on Congressional Knowledge Act and alerting them that the note would be the first of several pieces of correspondence in the weeks ahead.
“In an effort to help you and your staff understand and comply with the STOCK Act, the Committee will issue guidance in the weeks ahead, beginning with this letter, which describes the requirements you must comply with now and provides a timeline outlining when all the provisions of the new law will go into effect,” the letter reads.
A spokesman for the committee said that the continued guidance likely would be other Dear Colleague letters, new forms and quick reference guides to help Senators and their staffs with compliance.
The letter identifies several new requirements that were effective immediately. Senators must disclose mortgages for personal residences beginning with their financial disclosure reports due May 15.
Senators, officers and employees who must file a disclosure report because they make more than $119,554 are prohibited from purchasing securities as part of an initial public offering “in a manner other than is available to the members of the public generally.” Those same people must also disclose “negotiations or agreements for future employment within three days to the Committee” if there might be a conflict of interest or an appearance of a conflict of interest.
“The Committee will soon be issuing new disclosure forms and instructions regarding employment negotiations and recusal,” the letter reads.
It also alerts Members to new rules that took effect April 4, including a Senators-only disclosure of liability on a personal residence, a ban on purchasing securities “through an IPO for all Senate filers who earn at least $119,554,” and “future employment disclosure and recusal” for all Senate filers who earn at least $119,554. Senate filers must also “promptly” report any financial transaction in excess of $1,000 “unless you have a blind trust,” according to the guidance.
President Barack Obama signed the STOCK Act into law April 4. The measure was championed as a bipartisan victory, but some critics have said it does not go far enough in preventing the practice of Congressional insider trading, which came into media focus earlier this year as a result of a series of reports questioning investments made by lawmakers.
Each year since 1990, CQ Roll Call has reviewed the financial disclosures of all 541 senators, representatives and delegates to determine the 50 richest members of Congress. This year's report, derived from forms covering the calendar year 2012, shows it took a net worth of $6.67 million to crack the exclusive club.