WASHINGTON — Senator Scott Brown of Massachusetts is urging his Republican colleagues in the House to quickly close a loophole in a new insider trading law requiring most federal employees, including members of Congress and their staffs, to publicly disclose investment transactions.
While federal employees must adhere to the new reporting rules meant to ban insider trading, their spouses and children are apparently under no such requirements because of the loophole.
With Brown among those at this side, President Obama signed the measure into law in April. The law, known officially as the Stop Trading on Congressional Knowledge Act, requires government employees to report investment transactions with 45 days. The law requires those reports to be disclosed on government websites.
The loophole was first reported this week by CNN, which traced it to revisions made by the offices of House Majority Leader Eric Cantor, a Republican from West Virginia.
Cantor’s office acknowledged to CNN that his office “inadvertently” edited the legislation so that spouses and children were exempt from the law’s requirements. While the Senate has interpreted the new law to include spouses and children, the House Ethics Committee issued guidelines that hew to the letter, not the spirit of the law.
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This story first ran on Boston Globe on July 20, 2012.