House Passes Stop Insider Trading Act

The U.S. House of Representatives on Wednesday passed the Stop Insider Trading Act, legislation aimed at restricting members of Congress from buying individual stocks while in office amid ongoing bipartisan concerns over conflicts of interest and public trust.

Sponsored by Rep. Bryan Steil (R-WI), the measure passed the House by a vote of 232-198 and now heads to the Senate, where its future remains uncertain.

Supporters of the legislation argue that members of Congress should not be able to trade individual stocks while receiving confidential briefings on national security, economic policy, and other government matters that could affect financial markets. They say the bill would help strengthen public confidence in Congress by reducing the appearance of lawmakers personally benefiting from information unavailable to the public.

Steil said his bill will restore trust in Congress by limiting opportunities for lawmakers to unfairly benefit financially while serving in office.

“The core of this bill is to prevent members and their immediate families from being able to profit off of any inside information they may garner while serving here in Washington,” Steil said. “We do that by banning members from buying individual companies’ shares of stock.”

Many members of Congress have notably seen unusual net worth increases while in office despite receiving an annual salary of only $174,000. Perhaps the most famous such case is former Speaker Nancy Pelosi, whose stock portfolio skyrocketed from roughly $600,000 when she first entered office in 1987 to roughly $280 million today – a rate of return exponentially greater than that of the overall market and even many hedge funds. There is even a “Pelosi Stock Tracker” social media page so everyday investors can track Pelosi’s trades.

The Stop Insider Trading Act builds on the STOCK Act of 2012, which prohibits members of Congress and federal officials from using nonpublic information for personal financial gain and requires disclosure of many financial transactions. However, the STOCK Act does not prohibit lawmakers from owning or trading individual stocks, and its enforcement mechanisms are weak.

Under the Stop Insider Trading Act, members of Congress, their spouses, and dependent children would be prohibited from purchasing new shares of individual publicly traded companies while serving in office. Lawmakers would also be required to publicly disclose planned sales of existing individual stocks between 7 and 14 days before completing a transaction.

The bill does not require members to sell stocks they already own before taking office. Existing holdings may be retained, and lawmakers would be permitted to invest in diversified mutual funds, exchange-traded funds (ETFs), private companies, and blind trusts.

Lawmakers who violate the legislation would face fines of $2,000 or ten percent of the value of the transaction, whichever is greater, in addition to forfeiting any profits earned through noncompliant trades.

“The American people deserve to know their Member of Congress is not profiting off insider information. The Stop Insider Trading Act ensures that cannot happen,” Steil added.

The issue has drawn increasing attention in recent years following scrutiny of stock trades made by lawmakers from both parties. Public polling has consistently shown broad bipartisan support for placing additional restrictions on congressional stock trading, reaching as high as 86 percent in some polls. Supporters argue the reforms would improve transparency and reinforce public trust in government.

Despite bipartisan backing, the legislation also drew criticism. Many House Democrats opposed the measure, arguing it does not go far enough because it allows lawmakers to retain stocks they owned before entering office rather than requiring them to divest existing holdings.

The House approved the legislation as part of a broader legislative package.

The bill now moves to the upper chamber, where senators have yet to signal whether they will take up the House-passed measure. While there is bipartisan support for tightening congressional ethics rules, questions remain over whether senators will support the House approach or pursue broader restrictions before sending any final legislation to President Trump for his signature.

Lillian Ferrell is a senior at Hillsdale College studying English and music. She has experience in journalism and podcasting as the host of the Grace Over Grind podcast. Her written work focuses on American politics, culture, and public policy.