In a(nother) bid to address concerns of insider trading, a bipartisan group of US Senators has introduced the “Ban Stock Trading for Government Officials Act.” The legislation aims to expand upon the existing Stop Trading on Congressional Knowledge (STOCK) law, which targets insider trading among members of Congress and their employees.
The new bill, spearheaded by Democratic Senator Kirsten Gillibrand and Republican Senator Josh Hawley, would impose a complete ban on stock trading for high-ranking government officials, including members of Congress, the president, vice president, and senior executive branch officials, as well as their relatives.
Unlike the current law, the proposed legislation does not allow any exceptions for officials’ trading in blind trusts.
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Penalties for violating the ban would be applied in varying degrees, with additional civil penalties for transactions involving “substantial monetary value” or deemed “extraordinary in nature.” This measure aims to strengthen accountability and promote fair practices within the government.
Furthermore, the proposed legislation requires Washington officials to file reports whenever they receive grants, loans, contracts, or other payments from the federal government, excluding regular salary compensation or tax refunds. Failure to comply with the transaction reporting requirements under the STOCK Act would lead to increased penalties of $500, up from the current $200.
Although the bill’s timeline for consideration in committee or advancement to the full Senate remains uncertain, lawmakers are actively addressing potential concerns about transparency and ethical conduct among high-ranking government officials.
Bills of this sort have been attempted numerous times but none have so far been successful. In January, Hawley reintroduced a bill to ban lawmakers from holding or trading individual stocks, and called the second version the Preventing Elected Leaders from Owning Securities and Investments Act, or the PELOSI Act. If passed, lawmakers who violate the bill will be required to “return their profits to American taxpayers.”
The bill was read twice and referred to the Committee on Finance but like many similar measures, it has failed to gain any traction.
Information for this story was found via Reuters, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
