House Panel to Vote on Insider Trading

Dec 6, 2011

Washington, Dec 6, 2011 -
House Panel to Vote on Insider Trading

The chairman of the House Financial Services Committee on Tuesday said he is planning to hold a panel vote next week on legislation to ban insider trading by members of Congress.

The announcement by Alabama Republican Rep. Spencer Bachus came as other lawmakers used a committee hearing to propose ways to prohibit lawmakers from using information they gather in the halls of Congress to trade stocks.

A bill by Rep. Louise Slaughter (D., N.Y.) would prohibit lawmakers from trading on information they learn on Capitol Hill and require more frequent disclosure of stock transactions. Similar proposals are pending in the Senate.

During the hearing, Robert Khuzami, the director of enforcement at the Securities and Exchange Commission, said approving legislation similar to the measure proposed by Mrs. Slaughter would make it easier for the agency to bring insider-trading cases against lawmakers.

Mr. Khuzami explained that under current law, a judge could strike down an SEC enforcement case against a lawmaker because a court might find that a member of Congress doesn't have a clear duty not to trade on information picked up in Congress. The issue of whether members of Congress have such a duty goes to the heart of the current debate about the insider-trading legislation.

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