Senate Bills Seek to Enforce Bans on Stock Trades by Members of Congress
WASHINGTON — Two bills introduced in the Senate this week would broaden the ban on members of Congress buying and selling stocks while they hold public office.
The bills from Democratic Sen. Jon Ossoff and Republican Sen. Josh Hawley follow a Business Insider report showing 52 members of Congress have violated a federal law intended to prevent insider trading in some way.
The reform bills already are running into opposition from House Speaker Nancy Pelosi, who said lawmakers should have the right to trade stocks.
The Business Insider report said that 182 senior congressional staff members also violated the STOCK Act.
The Stop Trading on Congressional Knowledge Act of 2012 was intended to end insider trading in Congress. The law prohibits lawmakers and their staff from using nonpublic information to earn personal profits, such as through stock transactions.
The Dec. 17 Business Insider report said federal lawmakers and their staff face minimal penalties for violating the law.
It also said, “Nearly 75 federal lawmakers … held stocks in COVID-19 vaccine makers Moderna, Johnson & Johnson or Pfizer in 2020, with many of them buying or selling these stocks in the early weeks of the pandemic.”
In addition, “15 lawmakers tasked with shaping U.S. defense policy … actively invest in military contractors,” it said.
The legislation introduced by Ossoff of Georgia and Hawley of Missouri seeks to close any loopholes that allow lawmakers to avoid the ban on stock trades.
Ossoff’s Ban Congressional Stock Trading Act would require lawmakers, their spouses and dependent children to put their stock portfolios into blind trusts. They could be fined from their salaries for failure to comply with the law.
“Members of Congress should not be playing the stock market while we make federal policy and have extraordinary access to confidential information,” Ossoff said in a statement.
He is one of only 10 members of Congress who have put his stock holdings in a blind trust.
A blind trust is an investment account in which the owner relinquishes control of the investments to a trustee, usually a bank. The owners are not informed about holdings in the trust and have no right to intervene.
Hawley’s Banning Insider Trading in Congress Act would ban stock trades by lawmakers but not their families. It authorizes the Treasury Department to seize any profits they make from trading.
Pelosi said at a news conference last month after the Business Insider report that lawmakers and top staffers should be required to report their stock holdings but allowed to continue trading.
“This is a free market and people, we are a free market economy,” Pelosi said. “They should be able to participate in that.”
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