AOC says it's 'not really a mystery' why Congress hasn't passed a stock trading ban for lawmakers given that 'an enormous amount' of them trade stocks

AOC says it's 'not really a mystery' why Congress hasn't passed a stock trading ban for lawmakers given that 'an enormous amount' of them trade stocks
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Democratic Rep. Alexandria Ocasio-Cortez of New York leaving a caucus meeting at the US Capitol on October 1, 2021.
Democratic Rep. Alexandria Ocasio-Cortez of New York leaving a caucus meeting at the US Capitol on October 1, 2021.Alex Wong/Getty Images
  • AOC said that lawmakers' own stock investments poses a roadblock to banning them from trading stocks.

  • She emphasized that it's individual stocks — versus something like mutual funds — that poses ethical risks.

  • "That is where we should be drawing the line," she said. She is co-sponsoring a bill to ban the practice.

Democratic Rep. Alexandria Ocasio-Cortez of New York offered a blunt assessment of why members of Congress haven't voted to ban themselves from trading stocks: because many of them hold lots of stock themselves.

In an interview with Yahoo Finance published on Wednesday, the progressive congresswoman said that it's "not a mystery to me" why a stock trading ban is "difficult to pass" in Congress, given that "an enormous amount" of members hold stock.

"I wouldn't be surprised if it was the majority of members of Congress holding and trading and individual stock," she said. "I don't know the actual numbers, but it is a very large degree."

Insider's "Conflicted Congress" investigation found that 277 lawmakers did not report owning individual stock investments in 2020 — which would mean just under half of lawmakers do have such investments.

Insider also found that existing provisions to combat insider trading, particular the STOCK Act, are poorly enforced, and dozens of lawmakers and nearly 200 staffers have violated the law's disclosure provisions.

Ocasio-Cortez went on to emphasize that potential conflicts of interest may arise out of individual stock holdings, but not more broadly-held investments.

"It's not to say that you can't have a retirement fund, or a college savings account, a blind trust, mutual funds, an index fund," she said. "These are vehicles of investments that are broad, that individual members of Congress don't have direct control over."

The New York congresswoman is a co-sponsor of the Ban Conflicted Trading Act, one of several different bills that would ban lawmakers from trading stocks. Notably, the bill allows members to continue holding widely held investment funds.

However, the ban supported by Ocasio-Cortez does not include spouses, which some have identified as a potential "loophole" in any potential reforms, given that spouses presumably discuss personal finances with one another.

The congresswoman also appeared to cite Insider's reporting about lawmakers buying up stocks in vaccine manufacturers. "But even last year, there was at least 75 Members of Congress that held individual stock in Johnson & Johnson, Moderna and Pfizer. We're talking about in the last one to two years," she said.

After initially opposing a stock trading ban, House Speaker Nancy Pelosi directed the Committee on House Administration to consider imposing higher penalties for STOCK Act violations, and she has since reversed her position on the issue.

"If members want to do that, I'm okay with that," Pelosi said recently, referring to a stock trading ban. Ocasio-Cortez had been critical of Pelosi's prior position in the past.

And recently, several new proposals to bar lawmakers from trading stocks have emerged. Just on Wednesday, Republican Sen. Ben Sasse of Nebraska re-introduced his own bill that would ban the practice.

"Keep up the pressure," Ocasio-Cortez wrote in a tweet on Wednesday. "It's working."

Recent polling has shown that anywhere between 67% and 76% of the public supports banning lawmakers from trading stocks.

"So, that is where we should be drawing the line," Ocasio-Cortez continued. "Members of Congress have access to very sensitive security clearances, we have access to very detailed tailored briefs, our job is to try to anticipate and legislate for what we see is coming."

"We should not have the ability to have access to that information, and be able to hold on trading individual stocks," she added.

Read the original article on Business Insider