In the wake of Monday’s bipartisan 92-3 Senate vote to take up legislation that would ban members of Congress and their staffs from profiting from the use of nonpublic information when investing, freshman Congressman Sean Duffy (R-WI) believes the much-discussed STOCK (Stop Trading On Congressional Knowledge) Act contains significant flaws that render the measure a largely symbolic gesture.
“The truth is, there are loopholes in that bill [the STOCK Act] you can drive a truck through,” said Rep. Duffy in an interview with Big Government.
A far better solution, says Rep. Duffy, would be to pass the bill he has introduced known as the RESTRICT (Restoring Ethical Standards, Transparency, and Responsibility in Congressional Trading) Act, which has been endorsed by the person responsible for spearheading insider trading reform, Breitbart editor Peter Schweizer, author of Throw Them All Out.
The RESTRICT Act’s strength, say supporters, lies in its simplicity: the bill would require all members of Congress to either place their assets in a blind trust or submit to a three-day public disclosure requirement for any and all investments.
Rep. Duffy believes that the RESTRICT Act’s straightforward approach solves at least three significant weaknesses found in the STOCK Act.
The first problem with the STOCK Act, says Rep. Duffy, is that the bill only requires members of Congress to disclose stock trades of $1,000 or more.
“So you could trade $50,000 in one day in 50 trades at $950 a trade and never trigger the reporting requirement,” said Rep. Duffy. “It’s a big problem.”
Second, the STOCK Act gives lawmakers up to 30 days to publicly report their investment transactions. That, says Rep. Duffy, holds members of a Congress to a far lower standard than the one that applies to CEOs and corporate executives who generally must report their investments within 72 hours. The RESTRICT Act’s three day disclosure requirement for members who chose not to place their assets in a blind trust would remedy that.
Finally, Duffy believes that the STOCK Act, while well-intended, may unintentionally pave the way for politically motivated “witch hunts” against members of Congress who hold mutual funds that may include investments in business sectors that overlap areas Members legislate on.
“I want to keep members of Congress honest,” Duffy told Big Government. “But you don’t want to see legislation ensnare people who aren’t bad actors. You want to actually get the bad actors.”
In an opinion-editorial in the Wisconsin Rapids Tribune, Duffy summarized his case for the RESTRICT Act over the STOCK Act this way:
It’s time Congress led with the transparency and accountability worthy of our office. In an age of dysfunctional government and growing public cynicism, the RESTRICT Act is one of those rare bills that can help restore confidence in government and unite commonsense Americans on both sides of the aisle. What citizen doesn’t want to limit corruption and make sure Congress is working in the best interest of the people who elected them?
Let’s work together to restore high ethical standards in Congress — please share this column with your friends today. Help me spread the word about how we can “go all the way” to end Congressional insider trading by passing the RESTRICT Act.
The Senate’s Monday procedural vote clears the way for the chamber to take up a full vote on the STOCK Act, possibly as soon as this week. The House is expected to consider insider trading reform some time next month.