The President, last week, signed the Stop Trading on Congressional Knowledge Act (the “STOCK Act”), which amended the 34 Act and the Commodity Exchange Act.  The STOCK Act is significant for what it restricts, as well as for what it did not address notwithstanding a fair amount of hoopla.

The STOCK Act restricts members of Congress, as well as the executive and judicial branches, from participating in the insider trading of securities or derivatives based upon their unique access as government officials to non-public information.  This is significant in as much as it puts members of our government on the same plane as ordinary citizens when it comes to trading on insider information.

The critical thing about the STOCK Act is also what it failed to address, even though included as part of the Senate Bill.  Importantly, the Act does not require those people and firms engaging in political intelligence activities to register under the Lobbying Disclosure Act of 1995.  Political intelligence is information that individuals and firms gain from their interaction with government officials. 

Although absent from the Act, the focus on political intelligence is not being lost altogether.  Instead, the Act requires the Office of the Comptroller General to prepare a report on such activities and submit it to Congress.  The absence of political intelligence specifically from the Act may only be a delay to the creation of some new legislation that will explicitly focus on this area.  It would seem that Congress is only delaying further action until it has all of the facts to make a more fully informed decision.  Only time will tell.