Key takeaways:

• The Stop Trading on Congressional Knowledge Act of 2012 ("STOCK Act") was signed into law today. The STOCK Act affirms that members of Congress, their staff, and other employees of the federal government are not exempt from federal insider trading laws, and delineates a clear fiduciary duty that they owe to Congress, the United States, and the American people.
• Liability under the insider trading laws may extend in certain circumstances to third parties, including lobbyists and other representatives who interact with members of Congress, who receive and trade on material, nonpublic information.
• Although the scope of "material, nonpublic information" included under the STOCK Act has yet to be defined, hedge funds, private equity firms, and institutional investors should closely monitor their lobbyists’ and other representatives’ interactions with members of Congress, as well as consider new compliance policies to govern those interactions.