Obama calls for insider trading ban for Congress

President Obama is joining the call to ban insider trading by members of Congress.

In his State of the Union address, the president told lawmakers that he would immediately sign any bill prohibiting the practice, as well as preventing members from owning stock in industries they oversee.

“Send me a bill that bans insider trading by Members of Congress, and I will sign it tomorrow,” he said, according to prepared remarks.

Possible insider trading by lawmakers has come under harsh scrutiny in recent months, after a “60 Minutes” report and new book detailed instances where it appeared members may have used their status to personally profit on their portfolios.

Following the report, lawmakers rushed to introduce or sponsor existing bills making explicit that members cannot trade financial products based on private information they received due to their status as members of Congress.

Financial regulators have told Congress that members are not exempted from existing insider trading laws, but that no member has ever been actually prosecuted for violating existing laws.

The STOCK Act, introduced by Reps. Louise Slaughter (D-N.Y.) and Timothy Walz (D-Minn.), would explicitly ban members from insider trading, and has garnered nearly 250 cosponsors in the House. Several similar bills have been introduced in the Senate.

House Majority Leader Eric Cantor (R-Va.) told “60 Minutes” in a follow-up report that he expected to expand on the STOCK Act in 2012, after initially putting the brakes on the bill in December. House Financial Services Committee Chairman Spencer Bachus (R-Ala.), who was among the lawmakers singled out for questionable trades, was eager to advance the legislation, but Cantor slowed its progress, concerned it was being rushed.

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