What is the STOCK Act?

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What is the STOCK Act?

Senators selling stocks before the coronavirus pandemic rocked the markets have renewed attention on something called the STOCK Act. Here's what you need to know.

Reports of multiple senators selling stocks before the coronavirus pandemic rocked the markets have renewed attention on something called the STOCK Act.

The STOCK Act is a law that was passed in 2012 that says members of Congress and other government employees, including congressional staffers and members of the executive branch and judiciary, are not allowed to engage in insider trading based off information they learn through their jobs. If there are any legal consequences for the current controversy, this law would be at the center of it.

Here's what to know:

Votes in Congress

The STOCK Act passed the House 417-2 and the Senate 96-3. It was signed by former President Barack Obama on April 4, 2012.

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Sponsor

Sen. Joe Lieberman, D-Conn., who retired just months after the passage of the STOCK Act, was the bill's chief sponsor.

Sen. Joseph Lieberman, I-Conn., speaks on Capitol Hill in Washington, Wednesday, May 5, 2010. (AP)

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What does it do? 

The STOCK Act explicitly states that "members of Congress and congressional employees" are forbidden from using the nonpublic information they learn through their jobs "as a means for making a private profit," according to a Congressional Research Service summary of the bill.

It specifically changes two insider trading laws that were previously on the books but exempted congressional members and employees.

Additionally, the law requires certain financial disclosures not only from those working in the legislative branch, but also from the president, the vice president, executive branch employees, judges and more.

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Full name

The longer name for the STOCK Act is the "Stop Trading on Congressional Knowledge Act of 2012."

Has it been changed? 

In 2013, about one year after the STOCK Act's passage, Obama signed a change to the law that had been quietly ushered through Congress. It got rid of a provision that the financial disclosures required by the law be posted online on official websites.