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Congress members face new curbs on insider trading

Friday, March 23, 2012
(Reuters) - The Senate on Thursday voted overwhelmingly to send President Barack Obama legislation imposing new curbs on insider trading by members of Congress, even though the measure was weaker than a version it passed in February.

"After I sign this bill into law, members of Congress will not be able to trade stocks based on nonpublic information they gleaned on Capitol Hill," Obama said in a statement.

"It's a good first step. And in the months ahead, Congress should do even more to help fight the destructive influence of money in politics and rebuild the trust between Washington and the American people," Obama added.

Senators voted 96-3 for a motion that allowed automatic adoption of the Stop Trading On Congressional Knowledge Act, the most extensive effort to clamp down on Congress' personal dealings in years.

The approval margin was identical to a February 9 vote on the measure that included two key provisions that were dropped from the final version: one creating new legal tools for prosecutors to pursue public corruption cases and another that would require so-called political intelligence operatives to register under lobbying laws.

The legislation, once seen as a feel-good bill destined for swift passage, ran into problems when the House of Representatives passed a version of it without those provisions.

House Republican leaders argued that the political intelligence provision, which targeted former Capitol Hill insiders who use their contacts to gather information on pending legislation and sell it to Wall Street investors, could tread on First Amendment free speech rights. Business groups also complained that it would create problems for company executives who come to Washington for legislative conferences.

The final version orders a study of what to do about the increasingly widespread practice.

Senate Majority Leader Harry Reid attempted to convene a conference with House members to try to bring the final bill closer to the Senate's first version, but gave up this week and agreed to put the House bill to a vote.

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