Senators John Osoff, Mark Kelly introduce bill to ban stock trading by members of Congress

Members of Congress would face harsher penalties for trading stocks under legislation announced Wednesday by Democratic Senators John Osoff and Mark Kelly.

The Ban Congressional Stock Trading Act would require every member of Congress, as well as their spouses and dependent children, to hold their stock portfolios in a blind trust. The arrangement is to prevent members of Congress from using insider information to profit from their investments.

The senators said in a joint statement that members of Congress should not play the stock market while having access to confidential information.

“Elected leaders have access to valuable information affecting policy, the economy, and entire industries,” Kelly, of Arizona, said in the statement. “This legislation I’m presenting with Senator Osoff will end corrupt insider trading and ensure that leaders in Congress focus on delivering results for their constituents, not their stock portfolios.”

Senator John Osoff, D-Georgia, arrives at the Senate Chambers in October. Osoff announced Wednesday that he, along with Senator Mark Kelly, D-Arizona, is introducing legislation that aims to bar members of Congress from trading stock in office.
Anna Moneymaker/Getty Images

The bill comes because reporting has revealed how the country’s lawmakers have used information from committees for financial gain.

final defeat, newsweek reported that Congresswoman Lois Frankel, a member of a subcommittee overseeing funding to the Department of Energy, traded fossil fuel stocks during the global energy crisis. Senate Intelligence Chair Richard Burr sold $1.7 million worth of stock in 2020 after receiving daily briefings on the COVID-19 pandemic, despite reassuring the public, according to ProPublica.

Donald Sherman, Vice President and Chief Counsel for Citizens for Responsibility and Ethics newsweek On Wednesday evening, he welcomed the law.

“I think this is an important investigation to limit potential conflicts of interest for members of Congress,” he said. “I also think this is an important measure to promote confidence in the government.”

Congress passed the Stop Trading on Knowledge Act of Congress in 2012 in an effort to bring more transparency to members’ financial transactions. However, a report Published Tuesday by Insider found lawmakers who violate the law face a small fine, usually $200. The report found that 54 members of Congress had violated a law aimed at preventing insider trading and conflicts of interest.

The newly introduced Ban Congressional Stock Trading Act would greatly tighten penalties with members of Congress who violate the act facing fines of their entire Congressional salary.

Sherman said the hefty fine is justified because it would serve as a deterrent to some members of Congress who are already very wealthy.

The Federal Reserve said in October that it would adopt rules prohibiting policymakers and employees from trading individual shares and other securities. Other members of Congress have also voiced support for banning lawmakers from trading stock.

This idea has bipartisan support. As Axios reports, Senator Josh Hawley, R-Missouri is also planning to introduce a bill. Unlike the bill proposed by Osoff and Kelly, Hawley’s ban would exempt the dependents of lawmakers, and the Government Accountability Office would provide oversight.

Holly’s office did not respond of newsweek Request for comment Wednesday evening.

While the push for the ban is gaining ground, it is facing opposition from a significant source.

House Speaker Nancy Pelosi defended lawmakers’ ownership of shares during a news conference last month.

“We are a free market economy,” she told reporters. “They should be able to participate in it.”