New Bill Introduced To Ban Congressional Stock Trading
On Wednesday, Rep. Pat Fallon (R-TX) proposed legislation aimed at preventing members of Congress and their spouses from trading individual stocks, a move that would bring a long-overdue reform to the legislative branch.
The “Insider Trading Prevention Act” would prohibit lawmakers and their spouses from buying and selling a “covered financial instrument,” as defined by the Securities Exchange Act of 1934. This term includes securities but would exclude certain vehicles such as mutual funds, exchange-traded funds, U.S. Treasury bills, bonds, and notes, as well as any investment funds held in a federal, state or local government employee retirement plan.
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Furthermore, the measure would allow spouses of lawmakers to receive a “covered financial instrument” as payment for their work, provided it is part of their primary occupation and they have been employed in that occupation for at least one year. Those who violate the proposed law would face a fine of $25,000 per violation or an amount equivalent to the value of the financial instrument traded, whichever is larger.
The necessity of such a law is underscored by a national poll conducted last year by Morning Consult and Politico, which found that 68% of registered voters support banning stock trading for members of Congress. Additionally, a survey by the University of Maryland’s School of Public Policy revealed that 87% of bipartisan majorities favor prohibiting the president, vice president, and the Supreme Court from trading stocks in individual companies.
In a statement to the Daily Caller, Fallon explained the importance of the legislation, saying, “The Insider Trading Prevention Act is a critical first step to restore the public’s faith in Congress. This is clear, easy to understand, and will eliminate altogether good faith errors and, more importantly, egregious self-aggrandizement and insider trading.”
The push for such a ban has gained traction in recent years, with numerous social media users tracking the stock trades of several members of Congress to get ahead of the market. In 2022, nearly 100 members of Congress violated the STOCK Act, a bill intended to prevent insider trading. Among the worst offenders, according to Fallon, was former Speaker Nancy Pelosi, who has seen her assets increase by $140 million since the Great Recession.
By introducing the “Insider Trading Prevention Act,” Fallon has taken a crucial step toward restoring faith in Congress and ensuring that lawmakers are held to the same standards as the rest of the American public. The proposed legislation is a clear, easy-to-understand measure that would put an end to the egregious self-enrichment and insider trading that has plagued Congress for far too long.