A bipartisan group of senators, including Josh Hawley (R-Mo.), Jon Ossoff (D-Ga.), Jeff Merkley (D-Ore.), and Gary Peters (D-Mich.), have introduced a bill to ban members of Congress from trading stocks. The proposal, known as the Ending Trading and Holdings in Congressional Stocks (ETHICS) Act, aims to prevent lawmakers from profiting off of information that only they have access to.
The bill would immediately prohibit members of Congress, the president, and the vice president from purchasing stocks and other covered investments. Lawmakers would have 90 days to sell their existing stocks if the bill is passed. Additionally, starting in March 2027, lawmakers' spouses and dependent children would also be barred from trading stocks.
The penalty for violating the divestment mandate would be either the greater amount of the lawmaker's monthly salary or 10% of the value of each covered asset in violation. The bill also includes provisions for the U.S. president and vice president, as well as all members of Congress, to divest from covered investments starting in 2027.
The push to ban members of Congress from trading stocks has been ongoing for years, with Senator Ossoff first introducing a ban in 2021. The effort gained momentum following reports of profitable stock trades made by several senators at the onset of the Covid-19 pandemic, when lawmakers were receiving classified briefings on the potential economic impact of the virus.
Former Democratic House Speaker Nancy Pelosi, who had previously opposed the trading ban, eventually dropped her opposition ahead of the 2022 midterm elections. Pelosi's husband, a multimillionaire investor, regularly engages in stock trading.
The ETHICS Act is the latest attempt by lawmakers to address concerns about potential conflicts of interest and insider trading within Congress. The bill will now be considered by the Homeland Security & Governmental Affairs Committee, marking a significant step towards regulating lawmakers' financial activities.