Congress Votes to Delay Deadline for Reports on Insider Trading

The deadline for lawmakers and senior executive-branch officials to post financial disclosure forms online would be extended by a month under a bill the House and Senate passed in the waning hours before both chambers begin their August recess.

The new deadline would be Sept. 30.

The reporting require was established by a law enacted earlier this year to prohibit insider stock trading based on confidential government information.

Former senior U.S. national security officials sent congressional leaders a letter July 19 asking that military personnel, career diplomats and officials working in sensitive jobs be exempted from the disclosure requirements in order to protect their safety.

Former Homeland Security Secretary Michael Chertoff and former Director of National Intelligence Mike McConnell, along with a dozen other former officials signed the letter, which said, “Placing complete personal financial information of all senior officials on the Internet would be a jackpot for enemies of the United States intent on finding security vulnerabilities they can exploit.”

“We believe that this new uncontrolled disclosure scheme for executive branch officials will create significant threats to the national security and to the personal safety and financial security of executive branch officials and their families, especially career employees,” they wrote.

Although the letter sought an exemption only for some officials, the bill would extend the disclosure deadline for Congress and the entire executive branch and buy Congress more time to consider changes to the law.

“The security gap created by the STOCK Act’s online financial disclosure requirement must be closed for the safety of top military officers and others posted in dangerous locales around the globe and for our national security overall,” Senate Homeland Security and Governmental Affairs Committee Chairman Joe Lieberman, a Connecticut independent and original sponsor of the law, said in an e-mailed statement.

“Because Congress is about to recess, an extension of the effective date will give us the time we need to resolve this problem in September,” Lieberman said.

The bill also clarifies that the wives and dependent children of House lawmakers are covered by the law. The Senate Ethics Committee previously ruled that the law applies to family members of senators.

The bill is S. 3510.

To contact the reporter on this story: Chris Strohm in Washington at cstrohm1@bloomberg.net

To contact the editor responsible for this story: Katherine Rizzo at krizzo5@bloomberg.net

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