A new, bipartisan bill has been unveiled that would finally ban members of Congress from trading individual stocks. For over a decade, there have been a ton of different bills proposed to try and deal with this, but they’ve all pretty much stalled out because of disagreements over the details and a general lack of support from top congressional leaders.
This whole effort was led by two guys you wouldn’t necessarily expect to see working together: Texas Republican Rep. Chip Roy and Rhode Island Democrat Seth Magaziner. Rep. Roy told NPR, “They do not send us here to enrich ourselves while we are voting on the issues they send us here to fix and address and then have members who are trading stocks on the very issues they’re supposed to be voting on.”
It’s an issue that everyone seems to agree on, regardless of their political leanings, but those who profit don’t seem to think it’s an issue. To be fair, he’s got a point. It seems like a pretty basic ethical standard that someone voting on a bill shouldn’t also be profiting off the outcome.
Congress may stop profiting from its own decisions
The new legislation is pretty straightforward and to the point. It would require all current lawmakers to sell their individual stocks within 180 days. For any new members of Congress who get elected, they would have to get rid of their individual stock holdings before they can even be sworn in. This is a pretty tough stance, but honestly, it’s about time.
According to Magaziner, “It is long past time that we ban members of Congress from trading stocks. The opportunity for corruption is just so great. When members of Congress decide how to vote on a bill, they should vote on what they think is best for the American people, not on what is best for their investment accounts.”
It’s hard to argue with that logic, isn’t it? Questions about their personal trading activity have dogged lawmakers from both parties. For years, there have been concerns from watchdog groups about potential conflicts of interest for members who decide to buy or sell stocks after they’ve learned about nonpublic information from their committee work. Insider trading is a punishment in the business sector, but not in the place where decisions can literally change stock prices.
Trump had a fit about this when it was just an idea, but those who make the most will likely push back. If a member fails to divest, they’d face a fine that’s a whopping 10% of the value of the stock. The proposed ban is also pretty wide-reaching, extending to their spouses and even their dependent children. This is a big change from the past, which had a lot of loopholes.
What’s really interesting is how this new bill came to be. Unlike a lot of past efforts, this one was developed by a working group of people who sponsored all the different reform plans. They spent months trying to get everyone on the same page and consolidate support behind one single bill. The current legislation has a ton of backing from people across the political spectrum in Congress.
We already have a law in place called the STOCK Act, which was passed in 2012 after a bunch of news reports highlighted allegations of insider trading. That law requires lawmakers to disclose any trades over $1,000 within 30 days, but the fine for failing to report is only $200. This is awful for keeping people honest, and it’s pretty clear that it’s not really working. More than 10 years later, lawmakers are still beating the market and even inspiring new funds based on their trades.
Published: Sep 3, 2025 03:55 pm