Democratic and Republican lawmakers, including conservative firebrand Rep. Matt Gaetz (R-FL) and leftist rising star Rep. Alexandria Ocasio-Cortez (D-NY), proposed a bill that would ban members of Congress from trading individual stocks.
Several prominent lawmakers have been accused in recent years of using their intimate knowledge about forthcoming regulations or economic tumult to purchase stocks at opportune times and reduce losses by selling shares. The legislative proposal, entitled the Bipartisan Restoring Faith in Government Act, would prohibit lawmakers, their spouses, and their dependents from purchasing individual stocks or derivatives.
“The fact that members of the Progressive Caucus, the Freedom Caucus, and the Bipartisan Problem Solvers Caucus, reflecting the entirety of the political spectrum, can find common ground on key issues like this should send a powerful message to America,” Rep. Brian Fitzpatrick (R-PA), another sponsor of the bill, said in a statement. “We must move forward on issues that unite us, including our firm belief that trust in government must be restored, and that members of Congress, including their dependents, must be prohibited from trading in stocks while they are serving in Congress and have access to sensitive, inside information.”
Lawmakers would still be permitted to hold assets in a qualified blind trust or the federal pension system, as well as widely held investment funds and government securities.
The act is one of several legislative proposals to introduce bans on individual stock trading by lawmakers and their relatives: Sen. Josh Hawley (R-MO) earlier this year introduced the Preventing Elected Leaders from Owning Securities and Investments Act, also known as the PELOSI Act, while Rep. Pramila Jayapal (D-WA), Rep. Matt Rosendale (R-MT), and Rep. Ken Buck (R-CO) introduced a similar bill two months ago.
“Members of Congress are spending their time trading futures instead of securing the future of our fellow Americans. We cannot allow the Swamp to prioritize investing in stocks over investing in our country,” Gaetz said.
“When members have access to classified information, we should not be trading in the stock market on it. It’s really that simple,” Ocasio-Cortez said.
Several politicians executed bank stock trades over the past several weeks amid the collapse of Silicon Valley Bank, Signature Bank, and First Republic Bank, three medium-sized financial institutions which imploded as account holders with balances greater than the insured deposit threshold rushed to withdraw their funds. Rep. Nicole Malliotakis (R-NY) purchased as much as $15,000 in New York Community Bancorp, the company which acquired Signature Bank, days after she met with officials regarding the failure of the firm, according to a periodic transaction report. The wife of Rep. Earl Blumenauer (D-OR) meanwhile purchased as much as $15,000 in Silicon Valley Bank stock and sold as much as $15,000 in both Bank of America and First Republic Bank stock, according to another periodic transaction report.
As many as 97 lawmakers or their immediate family members purchased or sold assets related to their legislative committee work between 2019 and 2021, according to an analysis published last year by The New York Times. Paul Pelosi, an investor and the husband of Rep. Nancy Pelosi (D-CA), as well as Elaine Chao, a Republican who served as Transportation Secretary and the wife of current Senate Minority Leader Mitch McConnell (R-KY), traded individual stocks while their spouses were in leadership positions.
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