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Bipartisan Bill Bans Stock Ownership for Members of Congress

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What You Need to Know

  • The Ban Conflicted Trading Act would bar members of Congress from trading stocks and serving on corporate boards.
  • Several lawmakers sold stocks before the market cratered in March 2020, highlighting conflicts of interest.
  • The bill goes further than the 2012 STOCK Act.

A bipartisan bill that would ban members of Congress from trading individual stocks has been introduced in the House of Representatives and the Senate.

The Ban Conflicted Trading Act would bar members of Congress, along with their senior staffers, from buying or selling individual stocks and other investments and from serving on any corporate boards while in office.

New members would be allowed to sell individual holdings within six months of being elected, and sitting members of Congress would be allowed to sell individual holdings within six months after enactment of the bill. Congressional members would also have the option of retaining investments while in office if those investments were transferred to a blind trust.

When the bill was introduced on Wednesday, Sen. Jeff Merkley, D-Ore., a co-sponsor of the Senate bill, along with Sens. Sherrod Brown, D-Ohio, and Raphael Warnock, D-Ga., noted in a statement the “need to end the era in which members of Congress buy and sell individual stocks for personal gain. This practice is deeply corrupt.

“First, it biases the viewpoint of members when working on legislation related to a stock they own. Second, members trade on information they hear that the general public doesn’t. And that’s just wrong,” according to the statement.

Such conflicts of interest became an issue in March when it was disclosed that several Republican senators, including Richard Burr, R-N.C.; Kelly Loeffler and David Perdue, both Republicans from Georgia; and James Inhofe, R-Okla., had sold stocks following briefings about the growing coronavirus pandemic before the stock prices plunged in March. The husband of Sen. Diane Feinstein, D-Calif., also sold stocks before the March downturn.

Rep. Michael Cloud, R-Texas, co-sponsor of the bill in the House, said in a statement that members of Congress “should not be permitted to abuse the role in order to make financial gains.”

The Ban Conflicted Trading Act  goes further than 2012 legislation, the Stop Trading on Congressional Knowledge Act, aka the STOCK Act, which banned congressional members and  their aides from using information they gathered about pending or prospective government activity to trade stocks. Insider trading was and remains illegal, but the 2012 law clarified that the rule applied to members of Congress.

Pictured: Sen. Raphael Warnock, D-Ga., is a co-sponsor of the bill. (Photo: Bloomberg)