Key facts
- The US House of Representatives passed the Stop Insider Trading Act.
- The bill prohibits members of Congress, their spouses, and dependent children from buying publicly traded stocks.
- Violators face fines or disgorgement of profits.
The US House of Representatives approved a bill to prohibit members of Congress, their spouses, and dependent children from purchasing publicly traded stocks. The legislation, however, faces criticism for allowing current stock ownership and sales, with Senator Elizabeth Warren calling it insufficient.
The passage of the Stop Insider Trading Act highlights ongoing efforts to address potential conflicts of interest and insider trading among US lawmakers, though its effectiveness is debated, potentially impacting public trust in government financial dealings.
The US House of Representatives has approved the Stop Insider Trading Act, a bill designed to prevent members of Congress, their spouses, and dependent children from trading stocks. The legislation passed with a vote of 232-198 and now moves to the Senate.
Sponsored by Representative Bryan Steil, the bill mandates that lawmakers cannot purchase publicly traded stocks. Violators would face penalties including a fine of $2,000 or 10% of the transaction value, along with the disgorgement of any profits. Steil stated that the bill ensures lawmakers cannot profit from insider information and requires a seven-day notice period before selling existing stock holdings, intended as a deterrent.
However, some lawmakers, including Senator Elizabeth Warren, argue that the bill contains significant loopholes. Warren specifically pointed out that the legislation still permits lawmakers to own and sell stocks they already possess, suggesting it will not effectively solve the problem of insider trading within Congress. She expressed doubt about its passage in the Senate, advocating for a complete ban on stock ownership for members of Congress.
The House's passage of this stock trading bill follows Representative Steil's sponsorship of a similar measure targeting prediction market platforms. That bill, the Stop Lawmakers from Predicting Act, aims to prevent certain public officials from trading on platforms like Kalshi and Polymarket based on public policy and political outcomes.
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