The Stock Act recently passed in the House and Senate and would make it easier for the SEC to prosecute federal officials from any of the three branches who trade equities based on nonpublic information they receive in the course of their duties. The two bills, however, have some noteable differences. Among them:
Political Intelligence: The Senate version would require individuals and firms that collect political intelligence (i.e., nonpublic information from government officials that can help decide where to invest) to register and report their activities, much as lobbyists do now. It would also require a study on the growing political intelligence industry, which makes an estimated $400 million a year. The House version calls for a study, but does not include the reporting requirement.
IPOs: The Senate version changes nothing; the House version bans public officials from getting special access to IPOs.
Honest Services Fraud: The Senate version tightens the language of the law, which states that public officials and private citizens cannot deny their “honest services” to taxpayers or shareholders. The House version makes no changes.
Illegal Gratuities: The Senate version broadens the existing statute to apply to any case in which someone receives gifts because of their status as a public official; the House version makes no changes.