Wall Street Lobbies to Remove Registration from STOCK Act


New York, NY – Yesterday House Republicans introduced their own version of the STOCK Act, banning federal employees from using information obtained from their jobs to insider trade.  Unlike the Senate bill passed last week, the new House bill does not include the requirement that political intelligence firms register due to a concerted lobbying effort by Wall Street investment banks.

Last week the Senate passed its version of the STOCK Act by a vote of 96 -3, including an amendment by Senator Chuck Grassley (R-Iowa) that political intelligence firms register like lobbying firms.  This requirement is similar to the language included in House bill H.R. 1148 proposed by Reps. Louis Slaughter (D-NY) and Tim Waltz (D-MN).  The new GOP bill eliminated this requirement, replacing it with a Congressional study of the political intelligence industry.

Since the passing of the Senate bill, Wall Street banks and broker-dealers have been aggressively lobbying Congress to either remove the registration requirement or to alter the definition of what comprises “political intelligence” activity due to the extremely broad language currently included in the bill.

The language of the Grassley amendment suggests that any firm or individual that makes one contact with a covered legislative branch or executive branch employee to gather information on pending legislation, rules, regulations, executive orders, or policies for use in analyzing securities or commodities, or in informing investment decisions must register as a political intelligence provider.  These firms would have to register as a lobbyist does today, provide a list of all firms that receives this research, and list how much these clients pay for the research.

Many Wall Street firms employ internal lobbyists who lobby on behalf of their employers, collect political intelligence for bankers and analysts, publish research on legislative and regulatory policy issues for their clients, and who set up meetings between their clients and Washington insiders.   Based on the Grassley language, these firms would have to register as political intelligence providers.  However, some smaller broker-dealers argue that traditional research activity by their stock analysts, macroeconomists, or strategists could also force them to be registered.

What is interesting about this registration requirement is that Wall Street firms that use an existing “political intelligence” provider to obtain the information that their bankers or analysts need to conduct their business won’t need to register themselves.  Instead their providers will be required to.  But at least this keeps them from having to publically report their client and payment information on a regular basis.



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