On Wednesday, Senators Jon Ossoff and Mark Kelly (D–Georgia), introduced an anti-corruption law that would prohibit members of Congress and their family from actively trading stocks.
The Ban Congressional Stock Trading Act would require members to, with their spouses or dependent children, put all their stocks into a blind trust upon their election. Members and their families would be required to divest any stocks that aren’t able to be put into a blind trust. Democrats claim that the bill’s primary purpose is to increase transparency, accountability, and accountability to the public through reducing conflicts of interest.
“Members of Congress should not be playing the stock market while we make federal policy and have extraordinary access to confidential information,” Ossoff said in a statement. The bill has received the support of government watchdog organizations like the Project on Government Oversight.
Voters support measures to prohibit members of Congress trading stocks. A recent pollA survey of 1,706 voters revealed that 70 percent of Democrats, 78% of Republicans, and 80 percent among independents believed that Congressmen should be banned from stock trading.
Last year, Sen. Elizabeth Warren Introduced a billThis bill is also aimed at reducing corruption. Warren’s bill would go slightly further, banning other top government officials from trading stocks, including the president, Cabinet members, Federal Reserve officials and federal judges. However, her ban wouldn’t apply to family members.
If the Ossoff-Kelly bill is successful, it could prevent future scandals related to stock trading among Congressmen. Scams like the one involving Sen. Kelly Loeffler (R-Georgia), one of Ossoff’s predecessors in Georgia.
In 2020, the Justice Department was launched an insider trading probeinto Loeffler, Senators Richard Burr (R.North Carolina), Dianne Feinstein(D-California), and James Inhofe. Just before the stock market crashed, lawmakers sold major stock shares after receiving confidential briefings.
These investigations were dropped but stock trading scandals are still a common problem among Congress members. Reporters found that 54 members of Congress failed to properly report their stock tradesIn 2021, this is a violation of the STOCK Act. This Act aims to stop insider trading and increase transparency about the finances of Congress members. For each violation of the STOCK Act, an institution is subject to a $200 fine. This is a relatively low penalty. The housing millionaires are infamous.
It is not clear how effective the Ban Congressional Stock Trading Act will be. The financial penalties for violating the proposed law would be higher as members would be subject to a fine equal to their congressional salaries. According to the bill, the fines would be the “monthly equivalent of the annual rate of pay payable to the Member of Congress”; a typical member makes $174,000 a year, or about $14,500 a month.
Even though $14,500 may seem much more than the STOCK Act’s fee, it may not deter some members from giving up control of their stocks. Nancy Pelosi, House Speaker (D-California), is an example. owns millions of dollars’ worth of stocks; others, like Rep. Pat Fallon (R-Texas), have traded tens of millions of dollars’ worth of stocks in the past year alone.
Pelosi was somewhat offended by the bill. defended members’ ability to trade stocks in December. “We’re a free market economy,” she said. “They should be able to participate in that.”