A bipartisan group of more than a dozen lawmakers on Wednesday introduced a bill banning members of Congress and senior staff from buying and selling stocks, most bonds and options contracts.
Called the Ban Conflicted Trading Act, the measure is intended to prevent lawmakers and high-level staffers from enriching themselves through trades based on potentially market-moving information.
Lawmakers and senior staffers are already banned from making investment decisions based on nonpublic data obtained through their positions by the STOCK Act, a law signed by former President Obama. The practice of insider trading is also illegal under several federal securities laws.
The new measure, however, intends to hold lawmakers to tighter standards and prevent top congressional officials from making money off their positions even if the moves may not be considered insider trading.
“We need to end the era in which members of Congress buy and see individual stocks for personal gain. This practice is deeply corrupt,” said Sen. Jeff Merkley (D-Ore.), the lead Senate co-sponsor.
Along with Merkley, Democratic Sens. Sherrod Brown (Ohio) and Raphael Warnock (Ga.) introduced the bill in the Senate. Reps. Raja Krishnamoorthi (D-Ill.), Alexandria Ocasio-Cortez (D-N.Y.), Joe Neguse (D-Colo.), Matt Gaetz (R-Fla.), Michael Cloud (R-Texas.) and 10 additional Democratic lawmakers introduced it in the House.
“Congress must be held accountable to the American people,” Cloud said. “As elected representatives, we each have a constitutional obligation to honor the public trust we have been given. Members of Congress should not be permitted to abuse the role in order to make financial gains.”
The measure would force all members of Congress and staffers to file certain high-level disclosures to sell all stocks, non-Treasury bonds, options contracts and derivatives they own within six months of the bill’s enactment or after taking office. Lawmakers and covered staff can ask to transfer their holdings into a blind trust and can still make investments in most retirement accounts.
The bill was originally introduced during the previous Congress in 2019, months after former Rep. Chris Collins (R-N.Y.) was indicted for securities fraud related to an Australian pharmaceutical company for which he served as a director. Collins pleaded guilty and began a two-year prison sentence in October 2020 but was pardoned by Trump two months later.
A series of highly scrutinized trades made by lawmakers in the lead-up to the coronavirus pandemic last year also drove more support for limiting how members of Congress could invest.
Sen. Richard Burr (R-N.C.) faced a Justice Department investigation into his sale of up to $1.7 million in stock on Feb. 13 while he was receiving classified briefings as chairman of the Senate Intelligence Committee. The department closed the probe without charging Burr.
Former Republican Sens. Kelly Loeffler and David Perdue of Georgia also came under fire for selling millions of dollars in stock, much of it after Senate briefings on the pandemic. While both were eventually cleared by the Senate Ethics Committee, the optics may have played a role in their losses in January runoff elections.