Congress must strengthen protections against insider trading by its members and their families
In early 2020—as millions of Americans faced a terrifyingly novel virus, joblessness, uncertainty, and the tragic loss of loved ones—then-Sen. Kelly Loeffler (R-Ga.) was busy making millions of dollars on some highly suspect stock transactions. Now, Congress is finally starting to hold hearings and consider bills aimed at reining in insider trading among its own members.
Loeffler had access to confidential financial information, both by way of her husband Jeff Sprecher, chairman of the New York Stock Exchange, and her position in the Senate, which afforded her access to private briefings from top public health officials weeks in advance of the pandemic’s initial spike. Loeffler and her husband sold off millions of dollars worth of stock in the weeks before the pandemic stock market collapse, and purchased stocks in remote work software companies at a time when most Americans did not yet realize the effect the pandemic would have on their work. Though the Senate Ethics Committee investigation of Loeffler failed to find conclusive evidence of wrongdoing, that speaks more to the committee’s lack of aggression than facts on the ground. The American public knows lawmakers must be held to a higher standard—that’s why Congress must ban insider trading among its own members.
Politicians should not be allowed to use their status as elected officials to gain an unfair advantage and enrich themselves.
Existing ethics laws do not do enough to prevent senators and representatives from using the information they receive in the course of their legislative duties for personal profit. In fact, news broke in January that 57 members of Congress failed last year to comply with even the basic reporting requirements of the STOCK Act, a 2012 law passed to try and stop congressional insider trading. We can’t trust members of Congress to keep themselves honest when it comes to stock trading. To prevent future abuses of power like Loeffler’s, Congress must go beyond the STOCK Act and pass legislation banning members from buying and selling individual stocks while they’re in office.
Very little unifies the American public these days, but the widespread national outrage at public corruption comes close. An overwhelming majority of Americans—including 78 percent of Republicans—believe that members of Congress should not be allowed to buy or sell stocks while in office. Despite unrelenting gridlock on big issues, a number of major bills with bipartisan support are being considered to stop stock trading in Congress.
The Ban Congressional Stock Trading Act, introduced by Sen. Jon Ossoff (D-GA), would require all members of Congress, and their spouses and dependent children, to put certain investments into blind trusts or divest them. It also includes reporting requirements that increase transparency and accountability around members’ finances. The House version of the bill, called the TRUST Act, was introduced by Reps. Abigail Spanberger (D-Va.) and Chip Roy (R-Texas) last year. The Ban Conflicted Trading Act, introduced last year by Sens. Jeff Merkley (D-Ore.) and Sherrod Brown (D-Ohio) and House members ranging from Alexandria Ocasio-Cortez (D-N.Y.) to Matt Gaetz (R-Fla.), would bar members of Congress and senior staff from buying or selling individual stocks and from serving on corporate boards while in office. And just this week, Sens. Elizabeth Warren (D-Mass.) and Steve Daines (R-Mont.) teamed up on a bipartisan stock ban bill, Sen. Kirsten Gillibrand (D-N.Y.) introduced her STOCK Act 2.0 legislation with Rep. Katie Porter (D-Calif.), and Andy Kim (D-N.J.) introduced his Restoring Trust in Government Servants Act. The momentum is palpable.
The pandemic has shone a much-needed spotlight on the deep greed and corruption driving some of our country’s leaders. Loeffler’s pandemic profiteering was particularly egregious, but she was not the only public official abusing their access to confidential information for personal profit.
It’s long past time for our nation to modernize federal ethics laws and regulations to meet the expectations of the overwhelming majority of Americans who want to end corruption in public office. Congress must listen to the American people and pass legislation making it illegal for any sitting member of the House or Senate to trade individual stocks—after all, members are elected to Congress to look out for the best interests of the country, not their investment portfolios.
Lisa Gilbert is executive vice president at Public Citizen and Brett Edkins is managing director of policy and political affairs at Stand Up America.
The Hill has removed its comment section, as there are many other forums for readers to participate in the conversation. We invite you to join the discussion on Facebook and Twitter.