Today, Senator Chuck Grassley (R-IA) and Congresswoman Louise Slaughter (D-NY) released the following statement in response to a Government Accountability Office (GAO) report on Political Intelligence. The study was included in last year’s Stop Trading On Congressional Knowledge (STOCK) Act after provisions requiring the disclosure of political intelligence activities were stripped from the bill at the last minute.
“This report shows the dire need for transparency in the political intelligence industry, which profits from the cozy relationship between Washington, D.C., and Wall Street,” said Senator Chuck Grassley (R-IA) and Congresswoman Louise Slaughter (D-NY). “When a political intelligence professional is paid to gather inside information from congressional or agency sources that can be used to make investment decisions, that professional should have to register and disclose his or her activities to the public. This simple idea enjoyed strong bipartisan support from both houses of Congress last session, and when we re-introduce this disclosure requirement, we expect it to once again have widespread support among lawmakers and the public.”
Today, an article in the Wall Street Journal provided an example of how political intelligence can be used to give some investors an advantage in the market, and why such actions should be disclosed. On Monday, a political intelligence firm correctly reported that the Obama administration planned to announce a policy change that would benefit health insurers. According to the Wall Street Journal, “Shares in several big insurers rose as much as 6% between the time the firm, Height Securities, made its prediction at 3:42 p.m. and when markets closed. Volume for those companies in those final minutes was higher than the rest of the trading day put together. The government announced its change in policy about 35 minutes after the emailed scoop, which was reviewed by The Wall Street Journal. Shares continued to rise after the opening bell the next day.”
Today marks the one year anniversary of the STOCK Act.