US & Canada

US Senate backs Congress insider trading ban

The US Capitol building on 24 January 2012
Image caption Congress's approval ratings have been dismally low for months

The US Senate has approved a bill seeking to ban insider trading by members of Congress.

Under current rules, lawmakers can trade stock unrestricted even though they may have specialist knowledge.

The bill, passed by a bipartisan 96-3 vote, would require them to file disclosures of trades within 30 days.

Congress is suffering from historically low approval ratings, prompting frank admissions that the bill is aimed at cleaning up its public image.

"When polls show low public confidence in Congress, there is a strong desire to address the concerns that underpin the public's scepticism," Maine Republican Susan Collins said.

The bill is also expected to pass the House of Representatives, where Majority Leader Eric Cantor said he would introduce the legislation next week.

The Senate bill, which attracted more than 20 amendments during its consideration, extends the stock trading disclosure requirement to employees of the executive branch and independent government regulatory agencies.

President Barack Obama urged Congress to pass the legislation in his State of the Union address, and has said he will quickly sign it.

Mr Obama said the Senate vote was an "important step", but said there was more to be done before the US could eliminate the "corrosive influence of money in politics".

Curious trades

A plan to ban insider trading by members of Congress has only gained momentum in recent months, following a report in November by the CBS programme 60 Minutes.

The report found several representatives and senators, including senior figures on both sides of the political divide, had made trades shortly after receiving information not available to the public.

All of those named in the CBS report strongly denied any wrongdoing.

While trading based on non-public business information has long been illegal for legislators, the insider trading rule does not apply to information gained through working in Congress.

The new law would prohibit members of Congress profiting from that information, and would include reporting requirements for trades larger than $1,000.

The Senate rejected an amendment that would have required lawmakers to sell shares in companies which could benefit from votes they might make, a requirement for members of the US executive branch.

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