In the nature of a substitute.

SA 1470. Mr. REID (for himself, Mr. Brown of Massachusetts, Mr.
Lieberman, Ms. Collins, Mrs. Gillibrand, Mr. Levin, and Mr. Franken)
submitted an amendment intended to be proposed by him to the bill S.
2038, to prohibit Members of Congress and employees of Congress from
using nonpublic information derived from their official positions for
personal benefit, and for other purposes; which was ordered to lie on
the table; as follows:

Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Stop Trading on
Congressional Knowledge Act of 2012'' or the ``STOCK Act''.

SEC. 2. DEFINITIONS.

In this Act:
(1) Member of congress.--The term ``Member of Congress''
means a member of the Senate or House of Representatives, a
Delegate to the House of Representatives, and the Resident
Commissioner from Puerto Rico.
(2) Employee of congress.--The term ``employee of
Congress'' means--
(A) an employee of the Senate; or
(B) an employee of the House of Representatives.
(3) Executive branch employee.--The term ``executive branch
employee''--
(A) has the meaning given the term ``employee'' under
section 2105 of title 5, United States Code; and
(B) includes--
(i) the President;
(ii) the Vice President; and
(iii) an employee of the United States Postal Service or
the Postal Regulatory Commission.
(4) Judicial officer.--The term ``judicial officer'' has
the meaning given that term under section 109(10) of the
Ethics in Government Act of 1978.

SEC. 3. PROHIBITION OF THE USE OF NONPUBLIC INFORMATION FOR
PRIVATE PROFIT.

The Select Committee on Ethics of the Senate and the
Committee on Standards of Official Conduct of the House of
Representatives shall issue interpretive guidance of the
relevant rules of each chamber, including rules on conflicts
of interest and gifts, clarifying that a Member of Congress
and an employee of Congress may not use nonpublic information
derived from such person's position as a Member of Congress
or employee of Congress or gained from the performance of
such person's official responsibilities as a means for making
a private profit.

SEC. 4. PROHIBITION OF INSIDER TRADING.

(a) Affirmation of Non-exemption.--Members of Congress and
employees of Congress are not exempt from the insider trading
prohibitions arising under the securities laws, including
section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 thereunder.
(b) Duty.--
(1) Purpose.--The purpose of the amendment made by this
subsection is to affirm a duty arising from a relationship of
trust and confidence owed by each Member of Congress and each
employee of Congress.
(2) Amendment.--Section 21A of the Securities Exchange Act
of 1934 (15 U.S.C. 78u-1) is amended by adding at the end the
following:
``(g) Duty of Members and Employees of Congress.--
``(1) In general.--For purposes of the insider trading
prohibitions arising under the securities laws, including
section 10(b) and Rule 10b-5 thereunder, each Member of
Congress or employee of Congress owes a duty arising from a
relationship of trust and confidence to the Congress, the
United States Government, and the citizens of the United
States with respect to material, nonpublic information
derived from such person's position as a Member of Congress
or employee of Congress or gained from the performance of
such person's official responsibilities.
``(2) Definitions.--In this subsection--
``(A) the term `Member of Congress' means a member of the
Senate or House of Representatives, a Delegate to the House
of Representatives, and the Resident Commissioner from Puerto
Rico; and
``(B) the term `employee of Congress' means--
``(i) an employee of the Senate; or
``(ii) an employee of the House of Representatives.
``(3) Rule of construction.--Nothing in this subsection
shall be construed to impair or limit the construction of the
existing antifraud provisions of the securities laws or the
authority of the Commission under those provisions.''.

SEC. 5. CONFORMING CHANGES TO THE COMMODITY EXCHANGE ACT.

Section 4c(a) of the Commodity Exchange Act (7 U.S.C.
6c(a)) is amended--
(1) in paragraph (3), in the matter preceding subparagraph
(A)--
(A) by inserting ``or any Member of Congress or employee of
Congress (defined in this subsection as those terms are
defined in section 2 of the Stop Trading on Congressional
Knowledge Act of 2012)'' after ``Federal Government,'' the
first place it appears;
(B) by inserting ``Member,'' after ``position of the''; and
(C) by inserting ``or by Congress'' before ``in a manner'';
and
(2) in paragraph (4)--
(A) in subparagraph (A), in the matter preceding clause
(i)--
(i) by inserting ``or any Member of Congress or employee of
Congress'' after ``Federal Government,'' the first place it
appears;
(ii) by inserting ``Member,'' after ``position of the'';
and
(iii) by inserting ``or by Congress'' before ``in a
manner'';
(B) in subparagraph (B), in the matter preceding clause
(i), by inserting ``or any Member of Congress or employee of
Congress'' after ``Federal Government,''; and
(C) in subparagraph (C)--
(i) in the matter preceding clause (i), by inserting ``or
by Congress''--

(I) before ``that may affect''; and
(II) before ``in a manner''; and

(ii) in clause (iii), by inserting ``to Congress, or any
Member of Congress or employee of Congress'' after ``Federal
Government''.

SEC. 6. PROMPT REPORTING OF FINANCIAL TRANSACTIONS.

(a) Reporting Requirement.--Section 101 of the Ethics in
Government Act of 1978 is amended by adding at the end the
following subsection:
``(j) Not later than 30 days after any transaction required
to be reported under section 102(a)(5)(B), a Member of
Congress or officer or employee of Congress shall file a
report of the transaction.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to transactions occurring on or after the date
that is 90 days after the date of enactment of this Act.

SEC. 7. REPORT ON POLITICAL INTELLIGENCE ACTIVITIES.

(a) Report.--
(1) In general.--Not later than 12 months after the date of
enactment of this Act, the Comptroller General of the United
States, in consultation with the Congressional Research
Service, shall submit to the Committee on Homeland Security
and Governmental Affairs of the Senate and the Committee on
Oversight and Government Reform of the House of
Representatives a report on the role of political
intelligence in the financial markets.
(2) Contents.--The report required by this section shall
include a discussion of--
(A) what is known about the prevalence of the sale of
political intelligence and the extent to which investors rely
on such information;
(B) what is known about the effect that the sale of
political intelligence may have on the financial markets;
(C) the extent to which information which is being sold
would be considered non-public information;
(D) the legal and ethical issues that may be raised by the
sale of political intelligence;
(E) any benefits from imposing disclosure requirements on
those who engage in political intelligence activities; and
(F) any legal and practical issues that may be raised by
the imposition of disclosure requirements on those who engage
in political intelligence activities.
(b) Definition.--For purposes of this section, the term
``political intelligence'' shall mean information that is--
(1) derived by a person from direct communications with
executive branch and legislative branch officials; and
(2) provided in exchange for financial compensation to a
client who intends, and who is known to intend, to use the
information to inform investment decisions.

SEC. 8. PUBLIC FILING AND DISCLOSURE OF FINANCIAL DISCLOSURE
FORMS OF MEMBERS OF CONGRESS AND CONGRESSIONAL
STAFF.

(a) Public, On-line Disclosure of Financial Disclosure
Forms of Members of Congress and Congressional Staff.--
(1) In general.--Not later than August 31, 2012, or 90 days
after the date of enactment of this Act, whichever is later,
the Secretary of the Senate and the Sergeant at Arms of the
Senate, and the Clerk of the House of Representatives, shall
ensure that financial disclosure forms filed by Members of
Congress, officers of the House and Senate, candidates for
Congress, and employees of the Senate and the House of
Representatives in calendar year 2012 and in subsequent years
pursuant to title I of the Ethics in Government Act of 1978
are made available to the public on the respective official
websites of

[[Page S170]]

the Senate and the House of Representatives not later than 30
days after such forms are filed.
(2) Extensions.--The existing protocol allowing for
extension requests for financial disclosures shall be
retained. Notices of extension for financial disclosure shall
be made available electronically under this subsection along
with its related disclosure.
(3) Reporting transactions.--In the case of a transaction
disclosure required by section 101(j) of the Ethics in
Government Act of 1978, as added by this Act, such
disclosures shall be filed not later than 30 days after the
transaction. Notices of extension for transaction disclosure
shall be made available electronically under this subsection
along with its related disclosure.
(4) Expiration.--The requirements of this subsection shall
expire upon implementation of the public disclosure system
established under subsection (b).
(b) Electronic Filing and On-line Public Availability of
Financial Disclosure Forms of Members of Congress, Officers
of the House and Senate, and Congressional Staff.--
(1) In general.--Subject to paragraph (6) and not later
than 18 months after the date of enactment of this Act, the
Secretary of the Senate and the Sergeant at Arms of the
Senate and the Clerk of the House of Representatives shall
develop systems to enable--
(A) electronic filing of reports received by them pursuant
to section 103(h)(1)(A) of title I of the Ethics in
Government Act of 1978; and
(B) public access to financial disclosure reports filed by
Members of Congress, Officers of the House and Senate,
candidates for Congress, and employees of the Senate and
House of Representatives, as well as reports of a transaction
disclosure required by section 101(j) of the Ethics in
Government Act of 1978, as added by this Act, notices of
extensions, amendments and blind trusts, pursuant to title I
of the Ethics in Government Act of 1978 through databases
that--
(i) are maintained on the official websites of the House of
Representatives and the Senate; and
(ii) allow the public to search, sort and download data
contained in the reports.
(2) Login.--No login shall be required to search or sort
the data contained in the reports made available by this
subsection. A login protocol with the name of the user shall
be utilized by a person downloading data contained in the
reports. For purposes of filings under this section, section
105(b)(2) of the Ethics in Government Act of 1978 does not
apply.
(3) Public availability.--Pursuant to section 105(b)(1) of
title I of the Ethics in Government Act of 1978, electronic
availability on the official websites of the Senate and the
House of Representatives under this subsection shall be
deemed to have met the public availability requirement.
(4) Filers covered.--Individuals required under the Ethics
in Government Act of 1978 or the Senate Rules to file
financial disclosure reports with the Secretary of the Senate
or the Clerk of the House shall file reports electronically
using the systems developed by the Secretary of the Senate,
the Sergeant at Arms of the Senate, and the Clerk of the
House.
(5) Extensions.--The existing protocol allowing for
extension requests for financial disclosures shall be
retained for purposes of this subsection. Notices of
extension for financial disclosure shall be made available
electronically under this subsection along with its related
disclosure.
(6) Additional time.--The requirements of this subsection
may be implemented after the date provided in paragraph (1)
if the Secretary of the Senate or the Clerk of the House
identify in writing to relevant congressional committees an
additional amount of time needed.
(c) Recordkeeping.--Section 105(d) of the Ethics in
Government Act of 1978 is amended to read as follows:
``(d)(1) Any report filed with or transmitted to an agency
or supervising ethics office or to the Clerk of the House of
Representatives or the Secretary of the Senate pursuant to
this title shall be retained by such agency or office or by
the Clerk or the Secretary of the Senate, as the case may be.
``(2) Such report shall be made available to the public--
``(A) in the case of a Member of Congress until a date that
is 6 years from the date the individual ceases to be a Member
of Congress; and
``(B) in the case of all other reports filed pursuant to
this title, for a period of six years after receipt of the
report.
``(3) After the relevant time period identified under
paragraph (2), the report shall be destroyed unless needed in
an ongoing investigation, except that in the case of an
individual who filed the report pursuant to section 101(b)
and was not subsequently confirmed by the Senate, or who
filed the report pursuant to section 101(c) and was not
subsequently elected, such reports shall be destroyed 1 year
after the individual either is no longer under consideration
by the Senate or is no longer a candidate for nomination or
election to the Office of President, Vice President, or as a
Member of Congress, unless needed in an ongoing investigation
or inquiry.''.

SEC. 9. OTHER FEDERAL OFFICIALS.

(a) Prohibition of the Use of Nonpublic Information for
Private Profit.--
(1) Executive branch employees.--The Office of Government
Ethics shall issue such interpretive guidance of the relevant
Federal ethics statutes and regulations, including the
Standards of Ethical Conduct for executive branch employees,
related to use of nonpublic information, as necessary to
clarify that no executive branch employee may use non-public
information derived from such person's position as an
executive branch employee or gained from the performance of
such person's official responsibilities as a means for making
a private profit.
(2) Judicial officers.--The Judicial Conference of the
United States shall issue such interpretive guidance of the
relevant ethics rules applicable to Federal judges, including
the Code of Conduct for United States Judges, as necessary to
clarify that no judicial officer may use non-public
information derived from such person's position as a judicial
officer or gained from the performance of such person's
official responsibilities as a means for making a private
profit.
(b) Application of Insider Trading Laws.--
(1) Affirmation of non-exemption.--Executive branch
employees and judicial officers are not exempt from the
insider trading prohibitions arising under the securities
laws, including section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 thereunder.
(2) Duty.--
(A) Purpose.--The purpose of the amendment made by this
paragraph is to affirm a duty arising from a relationship of
trust and confidence owed by each executive branch employee
and judicial officer.
(B) Amendment.--Section 21A of the Securities Exchange Act
of 1934 (15 U.S.C. 78u-1), as amended by this Act, is amended
by adding at the end the following:
``(h) Duty of Other Federal Officials.--
``(1) In general.--For purposes of the insider trading
prohibitions arising under the securities laws, including
section 10(b), and Rule 10b-5 thereunder, each executive
branch employee and each judicial officer owes a duty arising
from a relationship of trust and confidence to the United
States Government and the citizens of the United States with
respect to material, nonpublic information derived from such
person's position as an executive branch employee or judicial
officer or gained from the performance of such person's
official responsibilities.
``(2) Definitions.--In this subsection--
``(A) the term `executive branch employee'--
``(i) has the meaning given the term `employee' under
section 2105 of title 5, United States Code;
``(ii) includes--

``(I) the President;
``(II) the Vice President; and
``(III) an employee of the United States Postal Service or
the Postal Regulatory Commission; and

``(B) the term `judicial officer' has the meaning given
that term under section 109(10) of the Ethics in Government
Act of 1978.
``(3) Rule of construction.--Nothing in this subsection
shall be construed to impair or limit the construction of the
existing antifraud provisions of the securities laws or the
authority of the Commission under those provisions.''.

SEC. 10. RULE OF CONSTRUCTION.

Nothing in this Act, the amendments made by this Act, or
the interpretive guidance to be issued pursuant to sections 3
and 9 of this Act, shall be construed to--
(1) impair or limit the construction of the antifraud
provisions of the securities laws or the Commodities Exchange
Act or the authority of the Securities and Exchange
Commission or the Commodity Futures Trading Commission under
those provisions;
(2) be in derogation of the obligations, duties and
functions of a Member of Congress, an employee of Congress,
an executive branch employee or a judicial officer, arising
from such person's official position; or
(3) be in derogation of existing laws, regulations or
ethical obligations governing Members of Congress, employees
of Congress, executive branch employees or judicial officers.
______