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Insider trading was not federally regulated until 1934 when President Franklin D. Roosevelt signed into law the Securities Exchange Act following the 1929 stock market crash.
William Duer, who was appointed the first Assistant Secretary of the US Treasury in 1789, was the first known inside trader. He used his official position to gain inside information for speculating in the newly formed US investment market.
The Stop Trading on Congressional Knowledge (STOCK) Act, a bill extending insider trading regulations to the legislative branch, gained 85 new co-sponsors over five days following a Nov. 13, 2011 60 Minutes report alleging that several members of Congress used insider information for personal gain.
Article I of the US Constitution gives Congress the authority to discipline its members for financial wrongdoing.
On July 11, 1958, the US Congress established a Code of Ethics for Government Service that states that Congressmen should "never use any information coming to him confidentially in the performance of governmental duties as a means for making private profit,” but the Senate Ethics Manual says the Code has never been used as a basis for Senate disciplinary action.
The Honest Leadership and Open Government Act of 2007 requires online posting of representatives’ financial disclosure reports.