Senators reach bipartisan agreement to ban stock trading in Congress

A bipartisan group of senators on Wednesday launched a renewed push to ban members of Congress from trading stocks.

“Congress should not be here to make money,” Senator Josh Hawley (Republican, Missouri) said at a press conference on Capitol Hill on Wednesday. “There is no reason why members of Congress should benefit from information that only they receive.”

The proposal is the latest chapter in a years-long saga in Congress trying to pass regulations limiting lawmakers’ ability to buy and sell stocks, and the first to be formally considered by a Senate committee – in this case, the Homeland Security and Governmental Affairs Committee – on July 24.

Ethics experts say lawmakers’ access to the kind of information they receive gives them the potential to give the investor community an unfair advantage.

Wednesday’s amendment to an existing bill banning stock trading would immediately prohibit members of Congress, as well as the president and vice president, from buying stocks and other covered investments. It would also give members 90 days to sell their stocks.

Senators Hawley, Jon Ossoff (D-Georgia), Jeff Merkley (D-Oregon) and Gary Peters (D-Michigan) negotiated and announced the new details.

If the bill is passed, spouses and dependent children of lawmakers would be banned from trading stocks starting in March 2027. Starting that year, the U.S. president, vice president and all members of Congress would also be required to divest from all affected investments.

The penalty proposed by the senators for violating the divestment rule would cost the lawmaker either his monthly salary or 10 percent of the value of each breached asset, whichever is greater.

Efforts to ban members of Congress from trading stocks have been an uphill battle, at least since the beginning of the Biden administration.

Ossoff first introduced such a ban in 2021, using his own stock portfolio as an example and placing it in a blind trust.

The effort received additional impetus from revelations that several senators made highly lucrative deals in the early days of the Covid-19 pandemic, when members of Congress received confidential briefings warning of the virus’s devastating impact on the U.S. economy. The FBI opened insider trading investigations into three senators, but eventually dropped the probe without filing charges.

The effort gained further momentum ahead of the 2022 midterm elections after former Democratic House Speaker Nancy Pelosi dropped her opposition to it.

Pelosi’s husband is multimillionaire investor Paul Pelosi, who regularly makes large and lucrative stock trades. The then-Speaker had previously dismissed the trading ban as a misguided attempt to prevent lawmakers from participating in the “free market economy.”