The House of Representatives passed legislation Wednesday imposing new restrictions on congressional stock trading, though the measure has drawn criticism from Democrats who argue it falls short of meaningful reform.
The Stop Insider Trading Act cleared the chamber by a vote of 232 to 198, with thirteen Democrats joining a unified Republican caucus in support. Representative Bryan Steil of Wisconsin, who introduced the measure in January, described it as necessary to prevent lawmakers from exploiting privileged information for personal financial gain.
Under the legislation, members of Congress, their spouses, and dependent children would be prohibited from purchasing publicly traded stocks. The bill also mandates that lawmakers publicly disclose any intended stock sale at least seven days before the transaction to either the House clerk or Senate secretary.
Violations would carry penalties of $2,000 or ten percent of the transaction value, whichever amount proves greater. Additionally, violators would forfeit any gains realized from the sale.
The measure addresses longstanding concerns about conflicts of interest in Congress, where lawmakers regularly receive confidential briefings on matters that could affect financial markets. Steil stated Monday that the bill “ensures that lawmakers cannot use their position to profit off insider information they may garner while serving in Congress.”
However, the legislation’s prospects became complicated when Republicans attached an unrelated provision requiring photo identification for voting in federal elections. This addition aligns with President Trump’s push for stricter voter eligibility requirements but has intensified Democratic opposition.
Democratic critics have characterized the bill as inadequate reform. Representative Joe Morelle of New York argued Monday that the legislation permits members to retain existing stock holdings and liquidate them at will, potentially profiting from years of portfolio growth. He noted the absence of any divestiture requirement and criticized the measure for failing to address what he termed “unprecedented, absurd, and deeply offensive corruption currently taking place in the White House.”
Representative Pramila Jayapal of Washington dismissed the bill as “a fake stock trading ban.”
Democrats have advocated for more comprehensive restrictions, including a complete prohibition on stock ownership by members of Congress and extending such limitations to the president and administration officials.
Current law, the STOCK Act passed thirteen years ago, prohibits members of Congress and other federal officials from trading on nonpublic information and requires disclosure of transactions exceeding $1,000 within forty-five days. Yet enforcement has proven minimal. No member of Congress has faced prosecution under the law despite documented violations.
The debate underscores the challenge of implementing meaningful ethics reform when lawmakers themselves must vote on restrictions affecting their own financial activities. While both parties have expressed support for addressing conflicts of interest, disagreement persists over the scope and stringency of appropriate measures.
The legislation now moves to the Senate, where its fate remains uncertain given Democratic control and opposition to both the limited nature of the stock trading restrictions and the attached voter identification requirement.
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