Kaine, Colleagues Unveil Legislation to Ban Stock Trading by Members of Congress
WASHINGTON, D.C. – Today, U.S. Senator Tim Kaine joined 22 of his Senate colleagues today in introducing the Ending Trading and Holdings in Congressional Stocks (ETHICS) Act—new, comprehensive legislation that would prohibit members of Congress, their spouses, and dependent children from abusing their positions for personal financial gain by owning or trading securities, commodities, or futures. The same legislation is being led by U.S. Representatives Raja Krishnamoorthi (D-IL) and Michael Cloud (R-TX) in the U.S. House of Representatives.
“Americans deserve to know that their representatives in Congress’ top priority is the well-being of their constituents—not their own personal bottom lines,” said Kaine. “I support this effort to put commonsense limits in place to help make sure that’s the case.”
According to the nonpartisan Campaign Legal Center, before the stock market was shaken by the onset of the global pandemic, dozens of House and Senate members made over a thousand financial transactions after receiving closed-door briefings. In 2022, Members of Congress made more than 12,700 individual trades, with dozens of members making above average gains. A 2022 New York Times investigation reported a fifth of all lawmakers trading in companies directly related to their work on a congressional committee. Even in a divided political climate, polling consistently shows that 70% of voters support banning members of Congress from holding individual stocks, including majorities of Democratic, Independent, and Republican voters.
The ETHICS Act would bar members of Congress, their spouses, and dependent children from owning or trading individual stocks, securities, commodities, or futures. Lawmakers often have advance notice of investigations, hearings, and legislation that can impact stock prices, or can move markets by supporting or enacting policy changes that affect specific companies or industries. The legislation gives several options to members of Congress who own covered assets, including divesting, diversifying into allowable assets—such as mutual funds—or placing assets into a Qualified Blind Trust (QBT). The ETHICS Act addresses concerns about Qualified Blind Trusts not being truly blind with new, enhanced provisions requiring divestiture of assets that go into the Qualified Blind Trust. The ETHICS Act strengthens congressional ethics, bans conflicts of interest and the appearance of conflicts of interest, and increases transparency in Congress.
The ETHICS Act includes strong penalties with enforcement by respective Congressional Ethics Offices. If Members or their covered family members continue to hold or trade in violation of the Act, the fine will be at least the value of the Members' monthly pay. The ETHICS Act also expands on disclosure requirements under 2012’s Stop Trading on Congressional Knowledge (STOCK) Act.
The ETHICS Act has received broad support from government ethics leaders and other groups across the political spectrum, including: Project on Government Oversight (POGO), Citizens for Responsibility and Ethics in Washington (CREW), Public Citizen, Progressive Change Campaign Committee (PCCC), MoveOn, National Taxpayers Union (NTU), Take On Wall Street, Stand Up America, Indivisible, RepresentUs, 20/20 Vision, Campaign Legal Center, Issue One, and Our Revolution.