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Legislation Banning Congressmen From Trading Stocks Introduced

Government

Rep. Zoe Lofgren, chair of the House Administration Committee | Image by New York Post

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Democratic leadership in the U.S. House, headed by Rep. Zoe Lofgren (D-CA), the chair of the House Administration Committee, plans to announce a framework next month for a proposal to ban lawmakers, their spouses, and senior staff from trading stocks.

The ban would make these lawmakers, spouses, and staffers choose between putting their stock assets in a blind trust, thus giving up control to an independent third party, or selling them altogether. The bill would still allow them to hold mutual funds.

The lawmakers hope to get the legislation to pass the House in September, according to Business Insider.

Lofgren is leading the final review of the proposal.

“We’re almost ready to move forward on this,” Rep. Lofgren said. “Public office is a public trust. It is my personal view that there should be regulation, or cessation, with respect to members and their spouses owning or trading stocks and other financial instruments,”

“For the past months, I have been seeking to build consensus on this issue so we can move forward,” Rep. Lofgren continued. “Having considered substantial input from our hearing and reviewed a range of legislative proposals, I hope to release a legislative framework for public review in the coming weeks.”

The announcement follows renewed controversy over congressional stock purchases. Last week, Speaker Nancy Pelosi’s (D-CA) husband Paul purchased over $1 million in shares of semiconductor firm Nvidia as Congress negotiated a bill to inject billions into the semiconductor chip industry.

The Senate passed that bill on Wednesday, and the House passed it on Thursday.

On June 17, Paul Pelosi bought 20,000 shares in Nvidia, worth between $1 million and $5 million, ahead of the Sunday vote on the CHIPS plus bill, which would direct $52 billion to the semiconductor market.

In her weekly briefing last week, a reporter asked Speaker Pelosi whether her “husband ever made a stock purchase or sale based on information” he received from her.

“No, absolutely not,” she responded before walking away from the podium.

Last Wednesday, Senator Josh Hawley (R-MO) wrote a letter to Chairman Peters about the alleged insider training in Congress.

Senator Hawley noted, “In 2020, Speaker Pelosi and her husband outperformed the S&P 500 by a whopping 14.3 percent.”

Though Pelosi’s husband has been at the center of criticism for stock trading, in February, the House Speaker said she would support a ban if it were aimed at Congress and all of the government.

“It has to be government-wide,” Pelosi told reporters. “The judiciary has no reporting. The Supreme Court has no disclosure. It has no reporting of stock transactions, and it makes important decisions every day.”

It was a reversal in position for Pelosi, who in December said she was against a ban on stock trading.

“We’re a free market economy. [Lawmakers] should be able to participate in that,” the House Speaker said in December.

There has been bipartisan support for a ban on stock trading for lawmakers, their spouses, and senior staff.

House Minority Leader Kevin McCarthy (R-CA) said he would consider introducing stock trading ban legislation if Republicans take back control of the House in November.

In Hawley’s Wednesday letter, he asked Democrats to hold a hearing on banning stock trading.

“This issue of whether and how Members of Congress engage in various financial transactions deserves scrutiny by the Committee,” Hawley wrote to Sen. Gary Peters (D-MI), chair of the Homeland Security and Government Affairs Committee.

The announcement of the upcoming House proposal also follows a Business Insider investigation, which suggested that 49 federal lawmakers and at least 182 top congressional staffers violated a federal conflict-of-interest law known as the Stop Trading on Congressional Knowledge (STOCK) Act of 2012 between January and September 2021.

The STOCK Act is intended to combat insider trading and conflicts of interest among Congress members and force lawmakers to be more transparent about their personal financial dealings. A key provision of the law mandates that lawmakers publicly — and quickly — disclose any stock trade made by themselves, a spouse, or a dependent child.

However, Insider concluded that several Congress members failed to quickly disclose their stock dealings, citing excuses that ranged from oversights to clerical errors to inattentive accountants.

When violators of the STOCK Act were found, the standard punishment was a $200 fine, often waived by House or Senate ethics officials.

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CITIZEN
CITIZEN
2 months ago

Just like shutting the barn door after the horses have left. What does pelosi care, she knows she is out.

caseyp
caseyp
Reply to  CITIZEN
2 months ago

Members of Congress make millions upon millions of dollars on insider trading. It will never happen. Public Law 112–105, the Stop Trading on Congressional Knowledge Act of 2012 was enacted, April 4, 2012. It didn’t do any good. We know that many rules and laws don’t apply to Democrats and many other members of Congress. They can write and pass as many bills as they want to but who’s going to enforce them when they are all breaking the law?

Marus Burnett
Marus Burnett
2 months ago

For this to work politicians would have to have ethics… they don’t

Bobby
Bobby
2 months ago

SURE if a DEMORAT is pushing this there is another AGENDA. Nancy PIGlosi – Chuck the Schmuck & Lardass Nadler will just pass the insider info on to someone else and still profit off the tax payers backs

Randall L Johnson
Randall L Johnson
2 months ago

The Sena t e needs to declare their standing.

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