The Stock Act is an Act of Congress designed to combat Congressional insider trading. It was signed into law by President Barack Obama on April 4, 2012. The law prohibits the use of non-public information for private profit, including insider trading by members of Congress and other government employees. It confirms changes to the Commodity Exchange Act, specifies reporting intervals for financial transactions.
As conceived, the STOCK Act is supposed to encourage members of Congress and their top aides to think twice about their personal financial trades, knowing they’d be subject to greater oversight by the public and their colleagues. When they disclose information months or even more than a year later, it becomes difficult to scrutinize their actions.
Under the STOCK Act, lawmakers and their senior staff who earned at least $132,552 a year in 2021 must report stock trades of more than $1,000 within 30 days of the transaction — or within 45 days if they didn’t learn about the trade until a little later, often because it was made by a broker or spouse.
If they file their disclosures more than 30 days after their due date, then they have to pay a late fee in the form of a check to the Treasury or apply for a waiver. The waiver process operates like an appeal. It gives people the opportunity to explain why they were late and to ask Senate or House committees to be excused from the penalty.
The notification and collection of late fees differ in the Senate and House.
No public records exist indicating whether these officials ever paid the fines. Congressional ethics staff wouldn’t confirm the existence of nonpublic ledgers tracking how many officials paid fines for violating the STOCK Act. And 19 lawmakers wouldn’t answer questions from Insider about whether they’d paid a penalty. Ten other lawmakers said they’d paid their fines, but they declined to provide proof, such as a receipt or canceled check.
So, insider trading by Congress is technically illegal, it is seemingly self-regulated.