Bipartisan Proposal Would Ban Stock Trading by Lawmakers
Measure would give members of Congress 180 days to sell off individual stocks
WASHINGTON—A group of House lawmakers from across the political spectrum has agreed on a proposal that would ban members of Congress from trading individual stocks, which proponents said marks the first realistic shot at reining in the practice in more than a decade.
The bipartisan bill, set to be unveiled next week, gives lawmakers and their family members a period of 180 days from enactment to sell off individual stocks they own, including ones held in blind trusts, according to a copy of the text viewed by The Wall Street Journal. Future lawmakers would have 90 days after being sworn in to sell off their stocks, according to the proposal.
Lawmakers who don’t comply would face fines equal to 10% of the value of the investment and would be forced to give up any profit they received, according to the 10-page proposal. The measure has several exceptions, including stock given to spouses and dependent children as part of their employment compensation, according to the bill’s text.
The proposal was negotiated by Rep. Seth Magaziner (D., R.I.). Talks included conservative Reps. Chip Roy (R., Texas) and Tim Burchett (R., Tenn.), and progressives such as Reps. Alexandria Ocasio-Cortez (D., N.Y.) and Pramila Jayapal (D., Wash.).
Momentum has grown in recent months to limit stock trades by members of Congress and their family members. Tariff-related stock-market fluctuations have put a spotlight on trades by lawmakers. Proponents have said new restrictions could help restore trust in Congress.
Speaker Mike Johnson (R., La.) said earlier this year that he supports a ban on trading, but he hasn’t thrown his weight behind any particular proposal. Treasury Secretary Scott Bessent said recently he is willing to start pushing for an individual stock trading ban. “People shouldn’t come to Washington to get rich,” he said. “It brings down trust in the system.”
President Trump has said he is “conceptually” open to further restrictions.
Lawmakers in 2012 passed the Stock Act mandating more disclosures and explicitly outlawing trading on nonpublic information. But they have struggled to ban trading outright despite broad support for such a move in Congress and among voters.
Opponents to new stock-trading restrictions pointed out that insider trading is already illegal. Securities and Exchange Commission officials, along with the Justice Department, can investigate suspicious trades. Others said forcing lawmakers to comply with more onerous requirements and the taxes and other costs associated with selling off individual stocks places an unnecessary burden on them.
Only a third of House lawmakers and slightly less than half of senators traded individual stocks or held them as assets while in office last year, according to an analysis of financial-disclosure filings. It is more common for lawmakers to hold investments in traditional mutual funds, which invest money across a spectrum of stocks. Those funds wouldn’t be affected by the proposed trading ban.
Members of Congress have said they routinely get access to information, including from senior government officials during classified briefings, which could provide insight into where the stock market is headed. Lawmakers negotiate legislation that could affect publicly traded companies, and work with committee staff to call in top executives for oversight hearings.
“We absolutely have access to insider information here. There is no question about it,” Rep. Brian Fitzpatrick (R., Pa.), a moderate involved in the negotiations, said in an interview earlier this year. “So to not acknowledge that, I think, is very dishonest.”