Congress passes scaled back STOCK Act

The dome of the US Capitol is seen in Washington on January 4, 2011.
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STOCK Act passes in Senate, heads for House
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Updated at 2:30 p.m. ET

Congress on Thursday passed a final, scaled-down version of the STOCK Act, a bill designed to stop so-called "congressional insider trading."

The measure, which passed in the House last month, would prevent members of Congress from financial market trading based on nonpublic information they have obtained in the course of their congressional work.

The Senate voted to proceed with the bill by an overwhelming vote of 96 to 3 -- far surpassing the 60 votes needed to overcome a filibuster -- and then passed the bill by unanimous agreement. The three senators who voted against proceeding with the bill were Republicans Tom Coburn of Oklahoma, Richard Burr of North Carolina and Charles Grassley of Iowa.

Lawmakers are already subject to insider trading laws, but some argue that current insider trading laws do not apply to nonpublic information about current or upcoming congressional activity, since members of Congress aren't technically obligated to keep that information confidential. The issue of "insider trading" in Congress came to the fore after a piece on CBS News' "60 Minutes" shed new light on the matter last year.

In order to pass both Houses of Congress, the legislation was pared back from its original form. The final bill dropped a provision passed in the Senate last month, which would have given prosecutors new tools to investigate and prosecute criminal conduct by public officials. The final version also left out a provision that would have required those employed in the burgeoning "political intelligence" industry to register with Congress in the same way that lobbyists do. In the political intelligence industry, people with access to insider information sell their knowledge of political developments to Wall Street investors, who then use it to make investment decisions.

The political intelligence provision was stripped in the House after House Majority Leader Eric Cantor said there should be more study of the issues involved. He also said the issue was outside the scope of the bill and wondered if the amendment could have negative consequences.

Rep. Louise Slaughter, D-N.Y., who first introduced the STOCK Act six years ago, hailed the passage of the legislation. "With today's passage of the STOCK Act, we can move one step closer to living up to the faith and trust bestowed upon us by the American people- the citizens for whom we serve," she said in a statement. She added, however that she remains "committed in the fight to bring the political intelligence industry into the light of day."

Slaughter and Rep. Tim Walz, D-Minn., introduced a separate bill in February to address the political intelligence industry and the prosecution tools that were dropped from the bill that passed today.