STOCK Act irks Wall St.’s tipsters, looks to stem Congressional "Insider Trading "
By Kevin Bogardus - 02/06/12 08:34 PM ET
The lucrative market for political intelligence that runs from Washington to Wall Street could be more fully exposed by insider-trading legislation that is moving quickly through Congress.
Lobbyists and operatives are bristling at a provision in the Stop Trading on Congressional Knowledge (STOCK) Act that would require many traders of political intelligence to register for the first time under the Lobbying Disclosure Act (LDA).
Observers say the intelligence trade is rapidly growing into a multimillion-dollar industry, powered by clients at hedge funds and other financial firms that can turn a tidy profit on the inside dope about the workings of Congress.
“They don’t want to impact the outcome. They want to know how it is going to play,” said a person who works in the industry. “You can trade it on either side.”
The disclosure provisions in the STOCK Act could put a crimp in the industry by revealing for the first time the true extent of the practice — and who’s engaged in it.