Updated July 20, 2023 at 2:46 PM ET
Two U.S. senators plan to introduce bipartisan legislation to ban lawmakers, executive branch officials and their families from trading and owning stock in individual companies, which they say has strong support from Americans.
New York Democrat Kirsten Gillibrand, who is sponsoring the legislation along with Republican Sen. Josh Hawley, told Morning Edition on Thursday she's standing behind the proposed bill because lawmakers have access to information that the public does not. If used improperly, she says, that could give lawmakers and their families an unfair advantage in the stock market.
"From the American people's perspective, they want members of Congress to come to Washington to work for them," Gillibrand said. "And they don't expect members of Congress to make money off of their jobs, particularly through the stock trade."
The bill, Ban Stock Trading for Government Officials Act would bar stock trading and stock ownership — even in blind trusts — for members of Congress, the president, vice president, and senior executive branch officials, including their spouses and dependents.
A national poll by Morning Consult and Politico shows 68% of registered voters support banning stock trading for members of Congress. Another survey conducted by the University of Maryland's School of Public Policy found a broad 87% of bipartisan majorities favor prohibiting the president, vice president and the Supreme Court from trading stocks in individual companies, too.
This is one of several attempts in the Senate to ban or limit stock trading by Congress members.
The bill builds on the STOCK Act, a federal law that forbids members from trading non-public information received from their jobs. Although the act sought to create transparency, Gillibrand said several members violated the act and improperly reported their stock trades, and others found loopholes. From 2019 to 2021, there were 97 members, their spouses or dependents, who traded in companies affected by their committees.
"So if they're not breaking the law, they're certainly creating an appearance of impropriety," Gillibrand said.
Under Gillibrand and Hawley's bill, members of Congress would be charged at least 10% of the value of the prohibited investments, while employees of the executive branch would have to forfeit their stock profits and face fine of $10,0000 or more, whichever is greater.
"It's got teeth," Gillibrand said.
The bill would also require a public and searchable database of members' stock transactions. Similar to the STOCK Act, failure to file their personal financial transaction would result in a penalty up to $500.
This issue resurfaced in 2021 when seven member of the U.S. House of Representatives were accused of failing to file reports of stock trades in large companies like airlines, gold mining and AI companies.
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