On April 4, 2012, President Barack Obama signed a bill banning insider trading by Congress as well as requiring thousands of federal employees to disclose personal financial records.
The bill will require Congress and federal agency officials to disclose all transactions within 45 days instead of once a year as currently required. The information will then be posted on the respective official websites of the Senate and House of Representatives.
President Obama's reasoning for signing the bill was to prevent government officials from using nonpublic information to gain unfair market advantages.
The new law:
- prohibits members of Congress and federal agency officials from trading stock and other securities for which they have received confidential information as law makers
- requires Congress and federal agency officials to disclose mortgage terms on their homes
- prohibits Congress and federal agency officials from receiving special access to initial public stock offerings
- requires a one-year study of "political intelligence" firms (defined as firms that sell information they collect from Congress to hedge funds, mutual funds and other investors)
President Obama also urged Congress to act on two other proposals: (1) limiting people who bundle campaign contributions for Congress from lobbying Congress; and (2) limiting elected officials from owning stock in industries that the officials impact.