(The hill) – A pair of Senate Democrats introduced a bill on Wednesday that would bar members of Congress and their families from trading in the stock market while in office.
The bill, dubbed the Congressional Stock Trading Ban Act, would require all sitting members of Congress, their spouses and dependent children to divest certain investments or transfer them to a qualified blind trust in 120 days after the enactment of the legislation. New members of Congress and their families should do the same within 120 days of taking office.
Investments in securities, commodities, futures or any other comparable economic interest obtained through synthetic methods, including the use of a derivative, would fall within the jurisdiction of the law. Lawmakers, however, would not have to divest or shift investments into diversified mutual funds or diversified exchanges, in addition to US Treasury bills, notes and bonds.
Members and their families will then be able to withdraw assets from the blind trust or dissolve it altogether 180 days after the legislature leaves. Members of Congress who violate the law would be fined the full amount of their congressional salary.
The push to ban members of Congress from making stock trades comes after reports surfaced that authorities were investigating whether Sen. Richard Burer (RN.C.) had violated federal insider trading laws when he liquidated the majority of his equity investments in February 2020 after receiving classified information about the COVID-19 pandemic.
Members of Congress must abide by the Stop Trading on Congressional Knowledge Act of 2012, or the STOCK Act, which prohibits them from using nonpublic information received in the course of their work for personal gain. It also requires lawmakers to disclose all financial transactions within 45 days of their completion.
However, a handful of lawmakers may have broken the rule. According to Business Insider, 54 members of Congress failed to report their financial transactions under the 2012 law.
A bipartisan group of lawmakers introduced a bill in March aimed at ban members of Congress and their senior staff to buy and sell stocks, most bonds and options contracts while serving in Washington, although he 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 imposing tougher regulations on members of Congress.
A survey commissioned by the conservative advocacy group Convention of States Action released last week found that 76% of voters surveyed think lawmakers and their spouses have an “unfair advantage” in the stock market. Only 5% of respondents supported allowing members to trade stocks, and 19% said they had no opinion.
Some lawmakers and politicians themselves support the effort. representing Alexandria Ocasio-Cortez (DN.Y.) said she supports a ban on stock trading by members of Congress, and Pennsylvania Lt. Gov. John Fetterman (D) – who is running to represent the Commonwealth in the US Senate – said this week that allowing members of Congress and their spouses to trade stocks is “an obvious conflict of interest.”
A notable element, however, is the President Nancy Pelosi (D-California), who said last month members should not be banned to make stock market transactions. Financial disclosure forms show that Pelosi’s husband, Paul Pelosi, is involved in stock trading.
“We are a free market economy. They should be able to participate,” Pelosi told reporters.
Ossoff wrote in a statement that “members of Congress should not play the stock market while we shape federal policy and have extraordinary access to confidential information.”
Kelly said in a statement that the bill “will end corrupt insider trading and ensure congressional leaders are focused on getting results for their constituents, not their stock portfolios.”