The STOCK Act and Whistleblowing

Congress appears poised to enact the Stop Trading on Congressional Knowledge (STOCK) Act to expressly extend the prohibition on insider trading to members of Congress and their staff.  Some argued that insider trading on Capitol Hill was already illegal, but the STOCK Act would make this explicit.  Both the House and Senate have passed versions of the STOCK Act that are to be reconciled in conference for final passage.

As the STOCK Act has progressed, some have raised concerns about how it might apply to particular activities, such as  political intelligence (more here).  On NRO, John Berlau and David Bier raised concerns that the STOCK Act could inhibit whistleblowing.  As written, Berlau and Bier fear either bill “would muzzle the communication necessary for sunlight and reform.”

Professor Bainbridge, who’s written more on Congressional insider trading than anyone (e.g. here and here), believes these concerns are unfounded because existing law already applies to Congressional staff and Whistle-blowing activity does not constitute illegal tipping.