Congressman Supports Bipartisan Effort To Ban Members From Trading Individual Stocks

Fitzpatrick, a Republican from Middletown Township, signed onto a letter Monday calling on House Speaker Nancy Pelosi, a Democrat from California, and Minority Leader Kevin McCarthy, a
Republican from California, to hold a vote on related legislation.

“There is no reason that members of Congress need to be allowed to trade stocks when we should be focused on doing our jobs and serving our constituents,” the letter stated.

The members of Congress said the Stop Trading on Congressional Knowledge Act, more commonly known as the STOCK Act, is not strong enough, citing members and their staffs being accused of using their insider knowledge to work the markets for a profit.

“In addition to ensuring that members’ access to information doesn’t advantage them over the public when trading stocks, as the STOCK Act sought, this would end the potential corruption of lawmakers pursuing policy outcomes that benefit their portfolios,” the letter said.

A report issued in early 2019 found lawmakers often earned higher returns on the stock market than average Americans.

In 2020, suspicions were raised after it was noted several U.S. senators had sold stocks after lawmakers were briefed on the threat from the novel coronavirus.

Senators Richard Burr, Kelly Loeffler, Jim Inhofe, and Dianne Feinstein – three Republicans and one Democrat – were probed by federal authorities related to stock sales, but no criminal charges were brought forward.

“Few of those who broke these rules faced repercussions. Some of the most concerning examples of this impropriety took place at the beginning of the COVID-19 pandemic when senators from both parties made significant stock sales after receiving closed briefings on the emergence of COVID-19 but before the pandemic was fully understood by the public and impacting the market,” Fitzpatrick’s office said in a statement.

Business Insider reported Pelosi has changed course on a ban, which she seems to now support in some form. She also has asked a House committee to investigate whether fines could be increased for violating the STOCK Act.

Fitzpatrick supports the Ban Conflicted Trading Act, which was introduced by Congressman Raja Krishnamoorthi, a Democrat from Illinois. The bill would ban members of the Congress and high-level staff from holding or trading individual stocks, except through a blind trust. It also would prevent members from being members or officers for for-profit boards.

The congressman also backs the proposed TRUST in Congress Act, which was put forward by Congresswomen Abigail Spanberger, a Democrat from Virginia. The bill would require members of Congress, their spouses, and dependent children to place any individual stocks in a blind trust and close the blind trust requirement 180 days after their tenure as a member of Congress ends.

Below is a full copy of the letter:

Dear Speaker Pelosi and Leader McCarthy,

We are writing to urge you to swiftly bring legislation to prohibit members of Congress from owning or trading stocks, such as the Ban Conflicted Trading Act or the TRUST in Congress Act, to the House floor. This common-sense, bipartisan legislation is unfortunately necessary in light of recent misconduct, and is supported by Americans across the political spectrum. Both of you have recently addressed this issue in public comments, but this glaring problem will not go away until it is fixed and Congress should not delay when we have the power to fix it.

As you know, Congress passed the STOCK Act in 2012 in an attempt to prevent members of Congress from using congressional knowledge to their advantage in stock trading. However, one recent investigation found that the STOCK Act had been violated hundreds of times just since 2020. It’s clear the current rules are not working.

In several particularly concerning cases from 2020, senators from both parties made significant stock sales after receiving closed briefings on the emergence of COVID-19 but before the pandemic was fully understood by the public and impacting the market. While those senators apparently did not violate the letter of the law, as the Department of Justice has closed investigations its of these trades, that outcome demonstrates how shamefully narrow the current law is. The law prohibits only those stock trades that members of Congress make or direct because of their nonpublic knowledge. But it can be nearly impossible to determine what counts as “nonpublic knowledge” or how personally involved members are in their stock trades.

Instead, Congress should close these loopholes by simply banning members from owning or trading individual stocks while in office. In addition to ensuring that members’ access to information doesn’t advantage them over the public when trading stocks, as the STOCK Act sought, this would end the potential corruption of lawmakers pursuing policy outcomes that benefit their portfolios. There is no reason that members of Congress need to be allowed to trade stocks when we should be focused on doing our jobs and serving our constituents. Perhaps this means some of our colleagues will miss out on lucrative investment opportunities. We don’t care. We came to Congress to serve our country, not turn a quick buck.

Americans across the political spectrum support banning members of Congress from trading stocks. According to recent polling, 76 percent of Americans—including 70 percent of Democrats, 78 percent of Republicans, and 80 percent of independents—say that members of congress should not be allowed to trade stocks.4 At a time when public confidence in Congress is low, holding ourselves to this standard would be an important step to earn back their trust.

We understand that multiple bipartisan bills to ban members of Congress from owning or trading individual stocks have been introduced in the House. However, handwringing over which bill to advance should be no excuse for stalling a House floor vote on this issue. Instead, we view the emergence of multiple bipartisan bills on this issue as a sign of broad rank-and-file support for it across Congress. Good-faith differences of opinion between members on the details of this legislation can be resolved through an amendment process.

While there are many difficult questions facing Congress, this is an easy one. Members of Congress should not be allowed to own or trade individual stocks. Let’s get this done.

Respectfully,

Brian Fitzpatrick (PA-01), Rashida Tlaib (MI-13), Matt Gaetz (FL-01), Jared Golden (ME-02), Mark Pocan (WI-02), Tom Malinowski (NJ-07), Susan Wild (PA-07), Conor Lamb (PA-17), Katie Porter (CA-45, Pramila Jayapal (WA-07), Chuy García (IL-04), Mary Gay Scanlon (PA-05), Abigail Spanberger (VA-07), Angie Craig (MN-02), Kathleen Rice (NY-04), Andy Levin (MI-09), Bill Foster (IL-11), Tom O’Halleran (AZ-01), Joe Neguse (CO-02), Dean Phillips (MN-03), Tim Ryan (OH-13), Greg Stanton (AZ-09), Andy Kim (NJ-03), Melanie Stansbury (NM-01), Ritchie Torres (NY-15), Matt Cartwright (PA-08), and Haley Stevens (MI-11).

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