Yahoo Finance's Rick Newman details the latest legislation banning Congress members from trading stocks, House Speaker Nancy Pelosi backing this ban, and what revisions could be included.

Video Transcript

ALEXIS CHRISTOFOROUS: Some lawmakers are throwing their support behind proposed legislation that would ban members of Congress from trading stocks in public companies to keep them from profiting from the insider knowledge they're privy to on Capitol Hill. Joining us now is Yahoo Finance's senior columnist Rick Newman. So Rick, look, I know that there's this Stock Act that already exists that's supposed to prevent insider trading. So how would this be different from that?

RICK NEWMAN: So the Stock Act, which Congress passed in 2012, says that members of Congress are not allowed to conduct insider trading. But then it doesn't say what insider trading really is. So there are all kinds of loopholes there that basically requires notification or some transparency that can go on for months. And there have been many members of Congress who simply don't disclose their trades.

So the new idea now is just ban all stock trading, not mutual funds or ETFs, but trading in individual shares, because there are many times when members of Congress do have information that's not public that could affect the value of a publicly traded company. I mean, just think of all the regulatory issues on the market. One example that has come up has been that members of Congress got briefings in the very early days of COVID suggesting that a pandemic was actually possible. And of course, that is what happened.

And there was at least one member of Congress, Senator Richard Burr of North Carolina, who is still under investigation for selling a bunch of stock right around the time he got a briefing on that matter back in 2020. So there's a lot of smoke here. It just does not look good. And finally, Congress members of both parties are saying, maybe we should do something about this.

JARED BLIKRE: And Rick, we got a little bit of breaking news here. Jen Psaki is addressing the press at the White House, and she just said that Biden has never traded stock as a member of the Senate. So we know this is wide reaching. Any concern that there's going to be some backdoor-- or looking back in time? There might be some historical aberrations here, kind of what we saw with the Federal Reserve maybe.

RICK NEWMAN: I think it would be hard enough just to get this passed. It sounds like a common sense thing, but it actually can get pretty complicated, Jared. For example, should-- if you ban members of Congress from trading stocks, should you also ban their spouses? Should you ban family members other than spouses? What about staffers? Should they also not be allowed to trade stocks?

So I think the complexities are severe enough just to enact something that would be in effect going forward. I don't think we'd be likely to see anything retroactive here. I mean, one of the things that Congress could do is go back and look at some of the waivers they've given to people. Sometimes they waive fees for people who are found to violate the Stock Act. I mean, maybe there could be some kind of full accounting of what's happened since 2012. But I think they have their hands full just getting a law passed.

ALEXIS CHRISTOFOROUS: I think you're right, but it does sound like this can be a bipartisan sort of effort, something both sides of the aisle can rally around. All right, Rick Newman, thanks a lot for breaking it down for--