Congress closes loophole in stock trading law after CNN report

(CNN) — House Republicans have been forced to close a potential loophole on their much-touted insider trading law — a loophole CNN uncovered and reported about last month.

Because of CNN’s report, the Senate and House passed new legislation Thursday to close the loophole that could have allowed family members of some lawmakers to profit from inside information.

Senators who were critical of the loophole after it was unearthed applauded the fix.

The STOCK Act, one of the rare bipartisan bills passed this year, was signed by President Barack Obama in April.

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Lawmakers proclaimed that the bill, officially called the Stop Trading on Congressional Knowledge Act, would restore trust in government. It also applied new rules to some employees of the executive branch.

But CNN discovered the law that members of Congress thought they voted for earlier this year wasn’t exactly as advertised. The STOCK Act requires that any trades of $1,000 or more made on or after July 3 have to be reported to the House and Senate within 45 days. But the House and Senate came out with two completely different interpretations of that rule.

In the Senate, the Ethics Committee released one page of guidelines in June ruling that members and their spouses and dependent children all have to file reports after they make stock or securities trades. But the House Ethics Committee disagreed.

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Its 14-page memo released in June found that House members and aides covered by the law that their spouses and children were not covered. The Office of Government Ethics, which oversees all federal executive branch employees, sided with the House, informing its employees that their spouses and children don’t need to file these periodic reports.

You can read the rest of this article at: http://www.cnn.com/2012/08/02/politics/stock-act-loophole/