House Panel to Hold Public Hearing on Stock Trading Reforms
WASHINGTON — The chair of the House Administration Committee has scheduled a public hearing on March 16 to examine proposed stock trading reforms for Congress.
“Over the past several weeks, the Committee on House Administration has been conducting a review of the STOCK Act, including members’ noncompliance with reporting requirements, as well as contemplating new enforcement requirements and penalties to create greater transparency and accountability in Congress,” Rep. Zoe Lofgren, D-Calif., said.
“The committee will hold a public hearing … with a panel of stakeholders and experts to be announced in the coming weeks.”
Pressure has been building on Congress to curtail lawmakers’ ability to speculate on the stock market ever since some lawmakers were found to be buying and selling millions of dollars worth of stock based on early word that a pandemic was coming that would shock the global economy.
That reignited long-standing calls for reform from government watchdogs who have argued that access to nonpublic information creates a temptation to profit that some lawmakers can’t resist.
In January, Sens. Mark Kelly, D-Ariz., and Jon Ossoff, D-Ga., introduced legislation to ban members of Congress and their families from buying and selling stocks while in office, and, in Kelly’s words, “put an end to corrupt insider trading and ensure that leaders in Congress focus on delivering results for their constituents, not their stock portfolios.”
The Ban Congressional Stock Trading Act will require all members of Congress, their spouses and dependent children to place their stock portfolios into a blind trust — ensuring they cannot use inside information to influence their personal stock trades and make a profit.
Members of Congress who violate the Ban Congressional Stock Trading Act will be fined in the amount of their entire congressional salary.
Reps. Abigail Spanberger, D-Va., and Chip Roy, R-Texas, introduced similar legislation in the House last year.
Despite the introduction of these bills and others with the same goal, skeptics maintain that efforts to tighten ethics rules often fall short, mainly because those being regulated are also the same people writing the rules.
With the 2022 midterms approaching, however, momentum to do something is growing.
House Speaker Nancy Pelosi has also endorsed strengthening the existing STOCK Act, which requires lawmakers to disclose their stock sales and purchases, but has also acknowledged that there is no clear-cut agreement on how to do that.
“It’s complicated,” Pelosi said last week. “What we’re trying to build is consensus.”
Pelosi has also called for extending stock trading disclosure requirements to members of the judiciary, while stiffening penalties for members of Congress who flout the rules.
“The judiciary has no reporting of stock transactions and it makes important decisions everyday,” Pelosi said earlier this month.
“We have to do this to deter something that we see as a problem. It is a confidence issue,” she said.
A bipartisan bill approved by the Senate last week would make it easier for the public to find out whether a judge’s investments could pose a conflict of interest in a case they are presiding over.
The measure, introduced by Sens. John Cornyn, R-Texas, and Chris Coons, D-Del., was passed by a voice vote last Thursday and has been sent to the House for consideration.
“Federal judges should never have been excluded from the STOCK Act’s disclosure requirements, and this oversight has resulted in conflicts of interest that erode public trust in our judiciary,” Cornyn said. “I am grateful for my colleagues’ support for this legislation, and I look forward to these important transparency and disclosure provisions becoming the law of the land.”
“I’m glad to see this commonsense reform pass unanimously in the Senate, and I look forward to President Biden signing it into law,” Coons said.
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