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Federal Judge Halts Enforcement of Controversial Stock Act Provision Federal Judge Halts Enforcement of Controversial Stock Act Provision

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Congress / CONGRESS

Federal Judge Halts Enforcement of Controversial Stock Act Provision

September 14, 2012

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A federal judge temporarily halted enforcement of the Stop Trading on Congressional Knowledge Act this week, ruling in favor of groups that argued that the law’s online financial-disclosure requirement violates constitutional rights.

Judge Alexander Williams Jr. of the U.S. District Court for the District of Maryland issued a temporary preliminary injunction on the enforcement of the Stock Act on Thursday; the 28,000 federal employees affected by the requirement will not have to disclose details about their financial transactions online until November.

In August, Congress extended the deadline on the enforcement of the Stock Act’s requirement that federal executives provide personal financial information for a public database. That extension came after the American Civil Liberties Union, along with several groups such as the Senior Executives Association, filed a lawsuit in a U.S. District Court in Greenbelt, Md., against the government.

 

In his filing, Williams wrote that the federal employee groups “have shown that they and thousands of other senior U.S. military officers and civilian employees will suffer irreparable harm in the absence of an injunction.”

The temporary preliminary injunction will maintain the status quo until Oct. 31, “to enable the parties to litigate this case in light of whatever changes Congress makes to the challenged statute in September,” Williams wrote.

The government has until the end of this month to respond to the ruling. In the meantime, Congress could amend the provision. In the filing, Williams wrote that “counsel for the United States agrees that amendment [to the Act] is likely.”

Lawmakers repeatedly have voiced similar concerns about the controversial provision of the Stock Act on behalf of federal employees. A spokeswoman for Sen. Joe Lieberman, ID-Conn., previously told Government Executive that the senator “would like to find a way to prevent online disclosure of personal financial information that would risk national security, or endanger safety of the filers and their families.”

The Senior Executives Association has called the Stock Act’s provisions a security threat that could hamper agencies from recruiting top talent. In August, SEA called the legislation an “inadequately considered law, unfortunately enacted with extreme haste in an election year.”

Before the Stock Act, high-ranking government personnel had to file financial disclosure forms, but they were available to the public only upon written request.

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