Rep. Katie Porter (D-CA) is one of several politicians calling for a ban on stock trading by current members of Congress.
“I strongly support moving quickly with a ban on congresspeople trading stocks,” Porter said. “And I think we need to make sure it’s robust. This cannot be a hollow disclosure policy. It needs to be a strong, substantive ban on either trading or owning.”
Porter’s proposed legislation, The STOCK Act 2.0, would not only prohibit lawmakers from trading individual stocks but would also cover the president, vice president, and Supreme Court justices, as well as Federal Reserve governors, presidents, and vice presidents. If these officials were to violate the law, they would be required to pay a civil penalty of “not less than 10% of the value of the covered investment” that was made in violation of the rule.
Porter’s bill, which expands on the existing disclosure rules in the STOCK Act, would also require members of Congress, their senior staff, and the Oval Office to disclose any time that they, a spouse, or a dependent applies for or receives a monetary benefit from the government.
Failure to file transaction reports as required by the proposed bill would incur a $500 penalty. Furthermore, both personal financial disclosures and STOCK Act transaction reports would be required to be made available to the public in an easily accessible manner.
“We have rules right now that say when Congress members trade stocks, they need to make those disclosures,” Porter said. “But what we’ve seen from both sides of the aisle is a failure to follow the rules that we established for ourselves.”
‘Congress has a special duty’
Under the STOCK Act of 2012, lawmakers are required to report their stock trades within 45 days of the transactions. However, a report by Insider found that 54 members of Congress have failed to properly report their transactions.
On top of that, following the COVID-induced stock market crash in March 2020, an investigation by ProPublica and The Center for Responsive Politics revealed that Sen. Richard Burr (R-NC), who was chairman of the Senate Intelligence Committee at the time and received confidential briefings about the emerging threat of the coronavirus pandemic, and his wife sold numerous stock shares following those briefings. (Burr denied the allegations, though the Securities and Exchanges Commission (SEC) is reportedly still investigating.)
Three other senators — Dianne Feinstein (D-CA), Jim Inhofe (R-OK), and Kelly Loeffler (R-GA) — were also scrutinized for stock transactions ahead of the market crash.
Following the revelation of those trades, other politicians proposed legislation aimed at preventing insider trading by members of the government. Sens. Jon Ossoff (D-GA) and Mark Kelly (D-AZ) introduced a bill that would prohibit members of Congress and their immediate family members from conducting any stock transactions while serving in office. If violated, the proposed law would have that lawmaker’s entire salary confiscated.
And a similar proposal was unveiled in Congress by Reps. Abigail Spanberger (D-VA) and Chip Roy (R-TX).
Porter, however, wants to make sure that whatever law is passed encompasses all branches of the government.
“Our democracy is only as strong as the people’s trust in government,” she said. “And that is true about the legislative branch, the judicial branch, and the administrative branch. So I think bans on stock trading need to apply to all branches of government and that Congress has a special duty to hold ourselves to the highest standards.”
Adriana Belmonte is a reporter and editor covering politics and health care policy for Yahoo Finance. You can follow her on Twitter @adrianambells and reach her at adriana@yahoofinance.com.
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn
,,,
