Democrats and Republicans on the House Financial Services Committee on Tuesday advocated new restrictions on insider trading to help lift waning public trust in Congress.
Previous efforts to pass restrictions on insider trading have not advanced in Congress. The issue re-emerged after a report last month by the CBS News program “60 Minutes,” which said members of Congress bought stock in companies during debates on legislation that might affect the businesses.
None of the investments by members of Congress was illegal, the report said.
“This is about restoring faith,” said Representative Tim Walz, a Minnesota Democrat who is sponsoring legislation to explicitly ban insider trading. “If you think a 9 percent approval rating is bad, don’t do anything, drag it out and watch what happens,” he said referring to polling on Americans’ approval of Congress.
The committee’s chairman, Spencer Bachus, an Alabama Republican, said the panel would vote on legislation next week. “It is absolutely essential that we do restore the public’s trust,” Mr. Bachus said. “If this is the answer, so be it.”
Mr. Bachus was among the lawmakers mentioned in the “60 Minutes” report.
In the segment on Nov. 13, CBS reported that, during the 2008 financial crisis, Mr. Bachus, then the ranking Republican on the Financial Services Committee, bet stock prices would fall while being briefed privately that a global crisis might be imminent.
In a statement at the time, Mr. Bachus’s office said he never traded on nonpublic information.
The CBS report generated interest by lawmakers in legislation first introduced in 2006 by Representative Louise Slaughter, a New York Democrat.
That measure was reintroduced this year by Mr. Walz. It would label as securities fraud any trading on legislative information by lawmakers or their staff members. The bill would require any trades of more than $1,000 to be reported within 90 days.
The bill would require regulators to draft rules barring individuals and political intelligence firms, which use their contacts in Washington to provide financial firms with market-related information, from selling nonpublic information obtained from federal employees. It also would require firms or individuals involved in political intelligence to register in the same way as federal lobbyists.
The Senate’s Homeland Security Committee, meanwhile, is examining bipartisan proposals to restrict certain trading by lawmakers and their aides, who often have access to nonpublic information as part of their jobs.
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