ACLU challenges congressional insider trading law

[JURIST] The American Civil Liberties Union of the Nation's Capitol (ACLU) [advocacy website; press release] filed suit [complaint, PDF] in federal court on Thursday arguing that a provision of a new law designed to stop insider trading by members of Congress and federal employees violates these employees' privacy and freedom of speech rights. The lawsuit, filed in the US District Court for the District of Maryland [official website] asserts that the Stop Insider Trading on Congressional Knowledge Act (STOCK Act) [S 2038, PDF] requirement that federal employees disclose all financial transactions over $1000 is an unconstitutional invasion of these employees' privacy. While the affected employees already have to file financial disclosures with the Office of Congressional Ethics (OCE) [official website], the STOCK Act requires that these disclosures be readily available on the Internet. The ACLU argues that the online publication of the disclosures will result in an irretrievable loss of privacy:

Publication of the financial disclosure forms of some 28,000 Executive Branch employees will cause them an immediate and irretrievable loss of their most private and confidential financial information. Details of their financial affairs, and the financial affairs of their spouses and dependent children, will be available to anyone in the world (literally) who has access to the Internet. No record will be made of who views or downloads the information. No restrictions will be placed on how the information will be used or distributed. Simply because they are senior civil servants or military officers, those Executive Branch Employees who file Form 278s will suffer the permanent loss of their confidential financial information.
The STOCK Act will take effect in September unless the court grants the ACLU's request to enjoin the law.

US President Barack Obama [official website] signed the STOCK Act into law in April [JURIST report]. The president highlighted the importance of the law [press release] saying that the law ensures that the powerful are playing by the same rules as everyone else. The president further applauded the act as an essential step in subduing the power of money in politics. Trades by members of Congress may be investigated by the OCE,. The STOCK Act was first introduced by Congresswoman Louise Slaughter [official website] in 2006.

 

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