(The Hill) – A pair of Senate Democrats introduced a bill on Wednesday that would ban members of Congress and their families from making stock trades while in office.
The bill, dubbed the Ban Congressional Stock Trading Act, would require that all sitting members of Congress, their spouses and dependent children divest from certain investments or transfer them into a qualified blind trust within 120 days of the legislation being enacted. Incoming members of Congress and their families would have to do the same within 120 days of taking office.
Investments in securities, commodities, futures or any other comparable economic interests obtained through synthetic methods, including the use of a derivative, would be under the purview of the law. Lawmakers, however, would not have to divest or transfer investments in diversified mutual funds or diversified exchanges, in addition to U.S. Treasury bill, notes and bonds.
Members and their families will then be able to remove assets from the blind trust or dissolve it completely 180 days after the lawmaker departs office. Members of Congress who violate the law would be fined in the amount of their full congressional salary.
The push to ban members of Congress from making stock trades comes after reports revealed that authorities were investigating whether Sen. Richard Burr (R-N.C.) had violated federal insider trading laws when he liquidated the majority of his stock investments in February 2020 after receiving classified briefings on the COVID-19 pandemic.
Members of Congress are expected to abide by the Stop Trading on Congressional Knowledge Act of 2012, or the STOCK Act, which prohibits them from using nonpublic information received as part of their job to turn a personal profit. It also requires that lawmakers disclose any financial transactions within 45 days of them being carried out.
A handful of lawmakers, however, may have failed to abide by the rule. According to Business Insider, 54 members of Congress have not reported their financial trades in line with the 2012 statute.
A bipartisan group of lawmakers introduced a bill in March that sought to ban members of Congress and their senior staff from buying and selling stocks, most bonds and options contracts while serving in Washington, though it did not advance on Capitol Hill.
In January, another bipartisan group of lawmakers led by Rep. Abigail Spanberger (D-Va.) reintroduced the Transparent Representation Upholding Service and Trust (TRUST) in Congress Act, which would require congressional lawmakers, their spouses and dependent children to transfer specific investments into a qualified blind trust while serving on Capitol Hill.
Now, however, the effort may gain traction as the American public appears to be in favor of placing stronger regulations on members of Congress.
A survey commissioned by the conservative advocacy group Convention of States Action released last week found that 76 percent of voters polled believe lawmakers and their spouses have an “unfair advantage” in the stock market. Only 5 percent of those polled were in favor of allowing members to trade stocks, and 19 percent said they did not have an opinion.
Some lawmakers and politicians themselves are getting behind the effort. Rep. Alexandria Ocasio-Cortez (D-N.Y.) has said she is for banning stock transactions by members of Congress, and Pennsylvania Lt. Gov. John Fetterman (D) — who is running to represent the commonwealth in the U.S. Senate — said this week that permitting members of Congress and their spouses to trade stocks is “a clear conflict of interest.”
One notable holdout, however, is Speaker Nancy Pelosi (D-Calif.), who last month said members should not be barred from making stock trades. Financial disclosure forms show that Pelosi’s husband, Paul Pelosi, takes part in stock trading.
“We’re a free market economy. They should be able to participate in that,” Pelosi told reporters.
Ossoff wrote in a statement that “Members of Congress should not be playing the stock market while we make federal policy and have extraordinary access to confidential information.”
Kelly said in a statement that the bill “will put an end to corrupt insider trading and ensure that leaders in Congress focus on delivering results for their constituents, not their stock portfolios.”