The US House of Representatives has voted 232-198 in favor of a bill banning stock trading by members of Congress. The Stop Insider Trading Act passed on July 22 and now heads to the Senate, where its chances face uncertainty.
Introduced by Wisconsin Republican Bryan Steil earlier this year, the legislation makes it illegal for lawmakers, along with their spouses and dependent children, to purchase securities from publicly traded companies. However, it notably allows members to keep and sell stocks they already hold, drawing sharp criticism.
Lawmakers must notify the House clerk or Senate secretary 7 to 14 days before selling existing shares. Penalties for violations include fines of $2,000 or 10% of the investment's value, whichever is greater, combined with forfeiture of any profits from unauthorized trades.
Steil hailed the bill as an important ethical reform, aimed at curbing the misuse of insider knowledge obtained through public office. Yet the bill’s limited scope has drawn rebuke from Senate Democrats such as Elizabeth Warren. She called the measure riddled with loopholes since it permits retention and sale of current holdings. Warren advocates for a full ban on ownership, buying, and selling of individual stocks by Congress members.
With the Senate now the next hurdle, the future of the bill remains in question. Warren’s rejection highlights the division over how rigorous restrictions on congressional trading should be, reflecting ongoing debates about transparency and conflicts of interest in Washington.
This material is for informational purposes and does not constitute financial advice.
