Bipartisan Legislation Aims to Ban Insider Trading for Members of Congress

Representatives Chip Roy and Seth Magaziner have introduced the Restore Trust in Congress Act, a bipartisan bill that seeks to ban members of Congress and their families from engaging in insider trading. The legislation, which reconciles multiple previously introduced bills, aims to promote transparency and accountability in government by prohibiting lawmakers from using their position for personal gain. Key proponents of the bill, including Congresswomen Pramila Jayapal, Alexandria Ocasio-Cortez, and Anna Paulina Luna, emphasize the need for Congress to restore public trust by ending the practice of trading individual stocks. The bill's provisions include a divestment process, penalties for non-compliance, and public disclosure of fines and disciplinary outcomes.

Key Takeaways:

The Restore Trust in Congress Act prohibits Members of Congress, their spouses, dependent children, and their trustees from owning, buying, or selling individual stocks, securities, commodities, or futures.
Exceptions are permitted for widely held investment funds, U.S. Treasury, state, or municipal bonds, notes, bills, precious metals, and shares of settlement common stock.
Covered individuals are prohibited from purchasing covered assets upon enactment and must divest from all covered assets at fair market value within 180 days for current members and 90 days for incoming members.
Individuals who acquire covered assets through inheritance during the course of their service will be required to divest those assets within 90 days of receipt.
Capital gains taxes may be deferred for all divestments through a Certificate of Divesture process.
The supervising ethics office will impose and enforce penalties, including fines equal to 10% of the value of covered assets, and issue any additional guidance.
Fines must be paid with personal funds, not office or campaign funds.
The supervising ethics office will publicly disclose fines and disciplinary outcomes.

Statistics:

234 Members of Congress and their families would be affected by the bill.
10% of the value of covered assets would be the penalty for non-compliance.
180 days would be the timeframe for current members to divest from covered assets.
90 days would be the timeframe for incoming members to divest from covered assets.
90 days would be the timeframe for individuals who acquire covered assets through inheritance to divest.

Sources:

U.S. House of Representatives, "Restore Trust in Congress Act" (no date, mention of bill introduction).
Office of Congressman Chip Roy, "Roy, Magaziner Introduce Bipartisan Legislation to Ban Insider Trading" (no date, mention of introduction and goals).