The U.S. House of Representatives on Thursday passed a bill that would prevent lawmakers and some government officials from trading stocks using information they have learned through their work, a major leap forward to stopping insider trading in Washington.
The House passed the measure – the Stop Trading on Congressional Knowledge Act, or Stock Act – by an overwhelming majority of 417-2, in a rare act of bipartisanship in a bitterly divided capital.
A similar bill was passed 96-3 by the Senate last week and the differences between the two will have to be ironed out before it can become law.
Eric Cantor, the House majority leader, removed a provision in the Senate version that would have forced people in so-called “political intelligence firms” – who collect financial information and sell it to investment firms – to register and publicly disclose their activities, as lobbyists must do now.
Such a requirement would be “unworkable,” Mr. Cantor told the House on Thursday.
But Democrats and Republicans alike criticized the move, saying the Republican leaders in the House had given in to pressure from Wall Street.
"It has been weakened totally as far as I’m concerned," said Louise Slaughter, the Democratic lawmaker from New York who has championed the new legislation.
Charles Grassley, a Republican senator from Iowa, said he would continue working to require the disclosure.
“I’m not going to forget about this, and it’s not going to go away,” he told Bloomberg Television.
“Can you believe what a few people in the House did to put this bill together behind closed doors?” he said.
A “conference” committee will attempt to bridge the gaps between the House and Senate bills so it can be signed into law by U.S. President Barack Obama.
Both versions would ban members of Congress, their staff and workers in independent federal agencies from trading stocks, commodities or futures based on inside information they learn through the course of their work.
All would be required to report any trades of $1,000 or more within 30 days of them being made, although investment funds would be exempt.
Mr. Obama, in his State of the Union address last month, urged lawmakers to send him "a bill that bans insider trading by members of Congress.
“I will sign it tomorrow,” he said.
Ms. Slaughter has been promoting the bill for years, but it did not gain wide support until a 60 Minutes television program in November reported that some lawmakers had profited from actions that would send most citizens to jail.
Laws relating to trading on non-public information do not currently apply to congressional activity.