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Bill filed to prohibit congressional insider trading

By the CNN Wire Staff
updated 10:01 PM EST, Tue November 15, 2011
"60 Minutes" examined investments of Rep. John Boehner, above, and Rep. Nancy Pelosi, among other members of congress.
STORY HIGHLIGHTS
  • Bill would prohibit members of Congress, their staffs, from trading on inside information
  • Members of Congress should live by the same rules everyone else does, sponsor says
  • Massachusetts senator files the bill after "60 Minutes" questioned congressional trades
  • House Minority Leader Nancy Pelosi criticized the report

Washington (CNN) -- Members of Congress and their staffs would be prohibited from using insider legislative information for investment purposes under legislation filed Tuesday in the wake of a CBS News "60 Minutes" report.

On Sunday, "60 Minutes" aired a report highlighting instances in which congressional officials reportedly bought stocks around the same time Congress was discussing legislation affecting those companies or industries.

The show looked at the investments of various lawmakers -- including House Minority Leader Nancy Pelosi, House Speaker John Boehner and Republican Rep. Spencer Bachus of Alabama.

The bill filed Tuesday by Massachusetts Republican Sen. Scott Brown would make it illegal for elected congressional officials, their staffs and executive branch employees to use information about pending bills that's not available to the general public in making investment decisions. It would also forbid them from making such information public for personal gain.

Brown's bill, which he called the Stop Trading on Congressional Knowledge, or STOCK Act, would clarify insider trading regulations that do not clearly identify whether the use of inside government information constitutes insider trading.

"Members of Congress should live under the same laws as everyone else. If they trade on inside knowledge to line their own pockets, they should be punished," Brown said in a statement, without referencing any of the officials named in the report. "Serving the public is a privilege and honor, not an opportunity for personal gain."

On Sunday, Pelosi fired back at the report, dismissing claims that her 2008 purchase with her husband of 5,000 shares of the initial public offering of credit card company Visa conflicted with a piece of legislation -- opposed by credit-card companies -- that was making its way through the House.

"It is very troubling that '60 Minutes' would base their reporting off of an already-discredited conservative author who has made a career of out attacking Democrats," Pelosi's spokesman, Drew Hammill, said in a statement soon after the report aired.

He added that Congress passed even stronger credit card legislation at about the same time.

In addition to Pelosi, the CBS report looked at the investments of of Bachus and Boehner.

Bachus bought options funds betting financial markets would fall at about the same time he met with with then-Treasury Secretary Hank Paulson, Federal Reserve Chairman Ben Bernanke and lawmakers about the imminent collapse of the global economy, CBS reported. He also traded General Electric stock, and roughly a third of GE's business is in financial services, CBS reported.

CBS said Boehner bought health insurance stocks during the health care debate, which increased in value after Republicans succeeded in killing a proposal to allow the government to offer a health insurance plan to compete with private companies.

In a statement, Bachus' office said the representative never trades financial services stocks or trades on private information. Boehner said at a news conference that he has not made decisions on his stock portfolio for years.

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