In an era of intense scrutiny over lawmakers‘ financial activities, a bipartisan group of Congress members have proposed a bill that would ban members of Congress from trading individual stocks. The legislation, titled the Bipartisan Restoring Faith in Government Act, is sponsored by conservative firebrand Rep. Matt Gaetz (R–FL) and leftist rising star Rep. Alexandria Ocasio–Cortez (D–NY) as well as Rep. Brian Fitzpatrick (R–PA).
The proposal comes in the wake of several prominent lawmakers being accused of using their inside knowledge about forthcoming regulations or economic tumult to purchase stocks at opportune times and reduce losses by selling shares. The Act would prohibit lawmakers, their spouses, and their dependents from purchasing individual stocks or derivatives.
“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,” Rep. Fitzpatrick said in a statement.
“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,” Rep. Gaetz added.
Several politicians‘ stock trades have been called into question in recent weeks amid the collapse of several medium–sized financial institutions. 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. 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 an analysis published last year by The New York Times, as many as 97 lawmakers or their immediate family members purchased or sold assets related to their legislative committee work between 2019 and 2021. Paul Pelosi, an investor and the husband of House Speaker Nancy Pelosi (D–CA), as well as Elaine Chao, the wife of Senate Minority Leader Mitch McConnell (R–KY), traded individual stocks while their spouses were in leadership positions.
The Bipartisan Restoring Faith in Government Act is not the only legislative proposal 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, while Rep. Pramila Jayapal (D–WA), Rep. Matt Rosendale (R–MT), and Rep. Ken Buck (R–CO) introduced a similar bill two months ago.
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 bill has been referred to the United States House Committee on Financial Services, and its fate remains uncertain.