In the ever-changing world of corporate political law regulation, one of the new kids on the block is the Stop Trading on Congressional Knowledge Act of 2012 (“STOCK Act”).  This new law was intended to apply criminal insider trading laws to trading on material, non-public information obtained from Congress, the executive branch, or the judiciary.  As the stock market surges today (as of this writing), based on reports that a resolution of the budget impasse and government shutdown might be near, we can’t help but think about the STOCK Act implications.

Washington is awash right now with lobbyists and consultants who are trying to divine when a deal will be struck, and what it will look like.  Most of what they will learn is speculative, and very little of it will be “actionable” intelligence that could be used as the basis for trading in the financial markets.  There is nothing illegal about punditry.  In theory, though, it is possible that someone in-the-know on the Hill, or in the executive branch, could leak very specific information about an imminent budget deal, or the terms of such a deal, to a trader.  Private access to that sort of very material information could be used to make a quick profit on the markets. The line that defines what would constitute material, non-public information, in the context of governmental information, is very fuzzy.  The STOCK Act is so new that there is little available guidance from the SEC or from case law.

We recently published an article in Wall Street Lawyer that describes the STOCK Act and some of its implications for those who gather information from the government that could be used for trading purposes.   Previously, we posted a client advisory summarizing the STOCK Act’s key provisions and providing some practical advice for complying with it.  We also recently posted a client advisory addressing the first signs of enforcement activity concerning the STOCK Act.  Covington has a unique, cross-disciplinary team of political lawyers and securities lawyers who advise clients on STOCK Act compliance programs and enforcement matters.  Such advice is in high demand at the moment.

Photo of Robert Kelner Robert Kelner

Robert Kelner is the chair of Covington’s nationally recognized Election and Political Law Practice Group.  He counsels clients on the full range of political law compliance matters, and defends clients in civil and criminal law enforcement investigations concerning political activity. He also leads …

Robert Kelner is the chair of Covington’s nationally recognized Election and Political Law Practice Group.  He counsels clients on the full range of political law compliance matters, and defends clients in civil and criminal law enforcement investigations concerning political activity. He also leads the firm’s prominent congressional investigations practice.

Rob’s political law compliance practice covers federal and state campaign finance, lobbying disclosure, pay to play, and government ethics laws. His expertise includes the Federal Election Campaign Act, Lobbying Disclosure Act, Ethics in Government Act, Foreign Agents Registration Act, and Foreign Corrupt Practices Act.

He is also a leading authority on the arcane rules governing political contributions and marketing activities by registered investment advisers and municipal securities dealers.

Rob’s political law clients include numerous multinational corporations, many of which are household names.  He counsels major banks, hedge funds, private equity funds, trade associations, PACs, political party committees, candidates, lobbying firms, and politically active high-net-worth individuals. He has represented the Republican National Committee, National Republican Congressional Committee, and National Republican Senatorial Committee.  He also advises Presidential political appointees on the complex vetting and confirmation process.

As a partner in the firm’s White Collar Defense & Investigations practice group, Rob regularly defends clients in congressional investigations before virtually every major congressional investigation committee.  He also defends corporations and others in investigations by the Federal Election Commission, the Public Integrity Section of the U.S. Department of Justice, federal Offices of Inspector General, and the House & Senate Ethics Committees.  He has prepared many CEOs and corporate executives for testimony before congressional investigation panels. He regularly leads the Practicing Law Institute’s training program on congressional investigations for in-house lawyers.  In addition, he is frequently retained to lead internal investigations and compliance reviews for major corporate clients concerning lobbying and campaign finance law issues.

Rob has appeared as a commentator on political law matters on The PBS News Hour, CNBC, Fox News, and NPR, and he has been quoted in the New York Times, Washington Post, Wall Street Journal, Associated Press, Legal Times, Roll Call, The Hill, Politico, USA Today, Financial Times, and other publications.

Rob is Chairman of Covington’s Professional Responsibility Committee and a General Counsel of the firm.  He also currently serves as Chairman of the District of Columbia Bar’s Legislative Practice Committee, and he previously was appointed by the President of the American Bar Association to serve on the ABA’s Standing Committee on Election Law.

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