WASHINGTON, D.C.—Today, Senator Ashley Moody and Senator Kirsten Gillibrand are announcing the bipartisan Restore Trust in Congress Act to stop insider trading by Members of Congress through banning the ownership and trading of individual stocks. Additionally, the Restore Trust in Congress Act extends the prohibition to their spouses and dependent children. These individuals may not purchase, sell, or hold covered investments.
This is companion legislation to the bill introduced by U.S. Representatives Chip Roy and Seth Magaziner in the U.S. House of Representatives, which currently has 126 total cosponsors. To date, 79 representatives – both Democrats and Republicans—have signed a discharge petition to bring this matter to the House floor for a vote.
The senators said, “It is fundamental to our Republic that members of Congress are focused on our nation and its citizens’ well-being, not how they may financially profit from their positions. That is why we are proud to introduce this commonsense bill to ban members of Congress from owning or trading individual stocks. We will continue to fight tirelessly to make sure it becomes law.”
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Covered investments under the bill include security, commodity, a future, or any comparable economic interest acquired through synthetic means, such as the use of derivatives. This does not include any widely held investment funds that are diversified and publicly traded; U.S. treasury bills, notes, or bonds; a State or municipal government bill, note, or bond; any compensation received by spouse or dependent child from their employer; an interest in a small business concern; an interest in a limited liability company created for the sole purpose of purchasing; or holding real estate that serves as a personal residence of a Member.
The bill would include:
- Qualified Blind Trusts: These trusts shall be divested while a family trust could be granted an exception by a supervising ethics office under certain circumstances.
- Divestment Requirement: Existing covered investments must be divested within a specified compliance period (180 days for current covered individuals and 90 days for new covered individuals).
- Limited Exceptions: Diversified mutual funds and certain broad-based investment vehicles are permitted.
- Penalties: Pay a fee equal to 10 percent of the value of the covered investment; and disgorge the profits of any transaction that violates the provisions of the above provisions.
- Each Supervising ethics office shall publish a publicly available website showing each fine assessed in accordance with the bill, the reasoning for the fine’s assessment, and the result of the assessment.
Read full bill text here.
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