House Minority Leader Nancy Pelosi On Thursday expressed support for an ban on insider trading by members of Congress, saying the House would consider a bill to overhaul the current measure.
“I think it’s important,” said Ms. Pelosi. “I would hope that it’s not as necessary as the whoop-de-doo over it makes it seem. But I do think that we all disclose what we do.”
The California Democrat’s comment comes as she was one target of a recent “60 Minutes” investigation that examined the trading practices of members of Congress. Ms. Pelosi, who denied any connection to insider trading, said she would support such a bill coming to the House floor, predicting that “it seems like it would fly through Congress.”
Ms. Pelosi’s support for the proposal comes as the Securities and Exchange Commission announced Thursday that while insider trading by U.S. lawmakers is unlawful, “distinct legal and factual issues” make it difficult to successfully prosecute.
“There is no reason why trading by members of Congress or their staff members would be considered ‘exempt’ from the federal securities laws, including the insider trading prohibitions, though the application of these principles to such trading, particularly in the case of members of Congress, is without direct precedent and may present some unique issues,” said SEC Enforcement Director Robert Khuzami said in written testimony to a Senate committee.
“There is no reason why trading by Members of Congress or their staff members would be considered ‘exempt’ from the federal securities laws, including the insider trading prohibitions,” Mr. Khuzami added.
The debate over whether members of Congress should have the ability to trade stocks based on confidential information released in connection to Congress has left members divided.
Connecticut Independent Sen. Joe Lieberman, who chairs the Senate Homeland Security and Government Affairs committee, held a hearing Thursday afternoon to focus on “Insider Trading and Congressional Accountability,” saying he supports legislation to clarify the current law banning insider trading.
“There is genuine ambiguity in the law… that needs to be resolved,” Mr. Lieberman said during the hearing.
