The STOCK Act prohibits members and employees of Congress and the Executive Branch from breaching their “duty . . . with respect to material, nonpublic information derived from [their] position,” to Congress, the US government, and the American people.1 The STOCK Act effectively makes clear that the insider trading prohibitions of the Section 10(b) and Rule 10b-5 apply to government employees. The STOCK Act only applies, however, to information obtained in connection with the member’s or employee’s official capacity as a government employee.
No member of Congress has been prosecuted under the STOCK Act since it was enacted on April 4, 2012, although, in the spring of 2020, several members of Congress were investigated by the SEC and DOJ based on stock trades made in alleged connection to briefing information members received regarding the COVID-19 pandemic.
1 The Stop Trading on Congressional Knowledge Act, Pub. L. No. 112–105, S. 2038, 126 Stat. 298 (2012).