STOCK Act (Stop Trading on Congressional Knowledge Act)

The STOCK Act, short for Stop Trading on Congressional Knowledge Act, is the 2012 federal law requiring members of Congress and senior congressional staff to publicly disclose any stock transaction above $1,000 within 45 days of the trade. It was passed specifically to address the concern that lawmakers, who often have early visibility into legislation, regulatory decisions, and committee-level information that can move markets, could otherwise trade on that knowledge before it became public, with no disclosure requirement forcing transparency.

A STOCK Act disclosure, formally called a Periodic Transaction Report, contains the member's name, the ticker, the transaction type (purchase or sale), and a value range rather than an exact dollar figure, since the form only requires a bracketed range like $15,001 to $50,000. It's most useful read in aggregate or by sector rather than as a single filing. A cluster of defense-sector purchases from members sitting on relevant committees ahead of a budget vote is a more meaningful pattern than any one member's individual trade.

A STOCK Act filing doesn't tell you why a member made the trade, and 45 days is the legal maximum, not a guarantee of speed. Many trades are filed close to that deadline, meaning the market has already had well over a month to move by the time a trade becomes public. It also doesn't distinguish a trade made on genuine nonpublic insight from routine portfolio rebalancing that happens to coincide with a member's committee assignment. Correlation between a committee seat and a sector trade is suggestive, not proof of anything improper. And value ranges mean two trades reported identically could differ by tens of thousands of dollars in actual size.

Suppose three senators sitting on a defense-oversight committee each file STOCK Act disclosures showing purchases in the same defense contractor's stock within the same two-week window, each in the $15,001 to $50,000 range, filed 40 days after the trades, near the legal deadline. Individually, each filing is unremarkable: a routine-sized purchase, disclosed within the legal window. Together, three overlapping trades from members with direct visibility into defense budget decisions is the kind of clustering that turns three ordinary filings into a pattern worth noting, even though none of the underlying facts alone proves anything beyond the disclosed trade itself.