Last modified: Monday, December 5, 2011
IU Maurer School of Law expert returns to Congress to testify on insider trading laws
House appearance follows Senate testimony last week
FOR IMMEDIATE RELEASE
Dec. 5, 2011
BLOOMINGTON, Ind. -- An Indiana University Maurer School of Law securities law expert is scheduled to testify before a House committee on pending legislation that would expressly prohibit insider trading by members of Congress and legislative staffers.
Professor Donna M. Nagy will testify at a hearing scheduled for 10 a.m. Tuesday, Dec. 6, before the House Committee on Financial Services, chaired by Rep. Spencer Bachus, R-Ala., with Rep. Barney Frank, D-Mass., as the ranking member. The hearing will focus on H.R. 1148, the Stop Trading on Congressional Knowledge (STOCK) Act. Nagy will testify that congressional insider trading is already illegal because anti-fraud provisions in the federal securities laws and the federal mail and wire fraud statutes apply equally to everyone, Congress included.
In addition, although Nagy applauds and endorses the motivation behind the proposed legislation, she will point out the concern that, in the absence of a modification to its wording, the STOCK Act could be viewed as the only insider trading law that applies to Congress. She will explain that this risk is troubling because the proposed legislation fails to reach a host of possible scenarios involving congressional insider trading that would almost certainly fall within existing law.
Other witnesses scheduled to testify include Robert Khuzami, director of the Division of Enforcement of the Securities and Exchange Commission, and Reps. Walter Jones, R-N.C., Louise Slaughter, D-N.Y., and Tim Walz, D-Minn., who are among the more than 100 co-sponsors of the STOCK Act.
Nagy presented similar testimony to the Senate Committee on Homeland Security and Governmental Affairs on Dec. 1.
Nagy is the C. Ben Dutton Professor of Law at the IU Maurer School of Law. She has written an extensive article titled "Insider Trading, Congressional Officials, and Duties of Entrustment," which can be accessed via the Social Science Research Network. She is available to comment on the STOCK Act and insider trading laws in general and can be reached at dnagy@indiana.edu, or at 812-856-2826.
