Stock ban proposed for Congress to stop insider trading among lawmakers
WASHINGTON — Representatives Abigail Spanberger and Chip Roy don’t often find themselves fighting on the same side.
Spanberger, a moderate Democrat from Virginia, and Roy, a conservative Republican from Texas, support a bill that would ban legislators from trading stocks in public companies to keep them from profiting from the insider knowledge they're privy to on Capitol Hill.
Both are lining up behind legislation proposed by freshman Sens. Jon Ossoff, D-Ga., and Mark Kelly, D-Ariz., which would require lawmakers and their immediate family members to put any stocks they own in blind trusts, eliminating any perceived conflicts of interest.
“When we’re going to briefings about issues that might be percolating in the world or when we’re voting on legislation that could potentially move markets, it just seems inappropriate to me that we currently have the ability to be able to buy or sell stocks that may or may not be associated with those decisions,” Spanberger told NBC News in an interview.
Spanberger introduced similar legislation in the House last year, called the Trust in Congress Act, which Roy cosponsored.
Congress tried to regulate stock trading by its members nearly a decade ago when the Stock Act became law to combat insider trading. But lawmakers still buy and sell hundreds of millions in stocks every single year, including at the beginning of the Covid pandemic, when they received detailed closed-door briefings before the rest of the country understood the scope of the disease.
“We’re voting on this stuff every single day. And yet people are buying and selling stocks or buying and selling Pfizer while we’re in the middle of the pandemic, like, how is that OK?” Roy said during an interview with NBC News.
A typical Stock Act violation rarely exceeds a fine of a few hundred dollars.
The FBI investigated Sen. Richard Burr, R-N.C., for stock trades made in February 2020 at the start of the Covid pandemic. The Department of Justice declined to press charges. Burr claimed he made the stock trades based on public information available from media reports.
Not all legislators are bullish about reform.
“Well, of course it should be carefully watched, but it is difficult to imagine in my job what is not a conflict of interest,” said Sen. Dick Durbin, D-Ill.
House Speaker Nancy Pelosi echoed the skepticism, saying she “trusts” her members to do the right thing but “to give a blanket attitude of can’t do this, and we can’t do that because we can’t be trusted. I just don’t buy into that.”
Pelosi said she doesn’t hold stocks herself. Her husband, Paul Pelosi, a venture capitalist, would be subject to the new rules.
“When I was campaigning in Georgia and promising the people of Georgia that I would push for anti-corruption reforms, I didn’t care then and I don’t care now if that ruffled some feathers, including in my own party,” Ossoff said in an interview, referring to his 2020 Senate bid, which hinged in part on allegations that his opponent had traded thousands of stocks that were under his purview as a member of the Senate subcommittee on cybersecurity.
“I just think the American people are kind of tired of the games up here on both sides of the aisle, and they just want to see us do our job, come up here as committed public servants and not get rich day trading,” Roy said.
The issue has made its way to the midterm campaign trail in Pennsylvania and Arizona, spanning both parties.
“Lawmakers shouldn’t be making profits off of the same companies they are supposedly regulating,” wrote John Fetterman, the lieutenant governor of Pennsylvania and a Democratic candidate in that state's U.S. Senate race, in a recent twitter message.
“I don’t think we can trust these people to police themselves. We just have to ban it,” Senate candidate Blake Masters, an Arizona Republican, said in December on a cable television show.
