Did you know members of Congress can buy and sell stocks, even while they’re making laws that could affect those companies?

If that sounds unfair to you, it’s because it is. Major issues arise when the very people who are supposed to regulate companies also stand to make a profit from their success. And in moments of economic turmoil, they may have access to information the public doesn’t, giving them a chance to protect their own finances or even make a lot of money before anyone else knows what’s coming.

Right now, lawmakers are supposed to report their trades to the public. But there’s no law stopping them from trading stocks altogether, even if it creates a conflict of interest. And when they break the rules? The fine is just $200.

Americans are fed up. That’s why a growing number of lawmakers from both political parties want to change the law and ban or restrict stock trading in Congress.

Why Stock Trading in Congress Is a Problem

Members of Congress have access to information that regular people don’t. They hear about big decisions, economic changes, and global emergencies before the rest of us do. That means they could make trades based on that information, even if they say they aren’t.

That’s what happened in early 2020. As the COVID-19 pandemic was starting to spread in the U.S., several members of Congress made big stock moves nach they got private briefings about the virus. Similarly, right before the Great Recession, several members of Congress profited from stock trades they made following a closed-door briefing on the state of the economy.

Stock ownership in Congress is bipartisan Und incredibly common. In the last congressional session, only 5% of members didn’t own any stock or widely held investment funds. Of the members that own shares of individual stocks, where the risk of corruption is highest, 59% were Republicans and 41% were Democrats.

What laws are currently in place?

Back in 2012, Congress passed a law called the STOCK Act. It required lawmakers to report their trades within 30 days so the public could see what they were doing with their money. 

The idea was to make things more transparent. But in reality, the law doesn’t have any teeth. The fine for breaking the rule is just $200 – a small price to pay when some trades make thousands or even millions of dollars.

Over 10 years later, not a single member of Congress has been prosecuted for violating the STOCK Act.

The Public Wants Action, and Lawmakers Are Starting to Listen

It’s not just watchdog groups and reporters who are paying attention. 86% of Americans want Congress to prohibit its members from trading stocks, including 88% of Democrats and 87% of Republicans. That’s close to total agreement that something has to change.

Now, some lawmakers are trying to do something about it. Here are a few examples:

• Senator Josh Hawley (R-MO) is backing the HONEST Act (formerly the PELOSI Act) and worked with Democrats to push it out of committee in the Senate.
• Senators Jeff Merkley (D-OR), Jon Ossoff (D-GA), and Gary Peters (D-MI) have also pushed for bans on member stock trading, working with Hawley last year to negotiate the ETHICS Act, a similar bill that would ban Members of Congress, their spouses, and their dependents from holding, buying, or selling stocks.
• In the House, Representative Anna Paulina Luna (R-FL) has said she will force a floor vote on member stock trading this fall.

To truly end congressional stock trading, what needs to happen?

To truly address the problem, we require more than transparency. Ensuring that representatives work for the people, not wealthy interests or their interests, necessitates restrictions on members of Congress and their spouses trading stocks while in office. 

We also need these restrictions to be enforced. Unlike under the STOCK Act, members of Congress would need to face meaningful accountability for breaking the rules.

So many Americans are on the same page: limiting Congressional members’ ability to trade stock is a simple step that could rebuild trust and reduce corruption in our government.