The "End Congressional Stock Trading Act" prohibits members of Congress, their spouses, and dependent children from owning or trading stocks and other securities, with exceptions for diversified investment funds, U.S. Treasury bills, and other specified assets, and imposes civil penalties for violations.
Tim Burchett
Representative
TN-2
The "End Congressional Stock Trading Act" prohibits Members of Congress, their spouses, and dependent children from owning or trading stocks, bonds, commodities, futures, and other securities, with certain exceptions like diversified investment funds and U.S. Treasury securities. Current and new members, along with their families, must divest prohibited assets within specified timeframes, with extended periods for complex investments. Violators may face civil penalties up to $100,000 per violation, and the bill allows for deferred capital gains taxes on required asset sales reinvested in permissible assets.
New Bill Bans Congressional Stock Trading: Lawmakers, Spouses, and Dependent Children Must Divest Within 180 Days
The End Congressional Stock Trading Act is pretty straightforward: It bans Members of Congress, their spouses, and dependent children from owning or trading stocks, bonds, and other similar investments. Think of it like this – if you're making the rules, you shouldn't be playing the market on the side. This is about making sure lawmakers are focused on serving the public, not their own portfolios.
Breaking Down the Ban
This bill changes the game by requiring current members and their immediate families to sell off any prohibited assets within 180 days of the bill's enactment, although it provides up to five years for more complex holdings like hedge funds. New members get a shorter leash – 90 days, with the same five-year exception. If they inherit stocks, for example, they've got 180 days to sell. (SEC. 2.)
For example, if a Senator's spouse works for a tech company and receives stock options as part of their compensation, those are generally okay, as long as it's their main job and not a side hustle. But if that same Senator suddenly starts trading tech stocks? Not allowed. The bill does allow for owning diversified mutual funds, Treasury bonds, or investments in employee retirement plans – basically, the stuff that doesn't scream 'conflict of interest.' (SEC. 2.(b)(1))
Real-World Impact
Imagine a Congresswoman on a committee overseeing the pharmaceutical industry. Under the current rules, she could theoretically buy stock in a drug company before a major announcement, potentially profiting from insider knowledge. This bill shuts that down. Or, consider a Congressman whose spouse inherits a large stake in an oil company. They'd have to sell it, preventing potential conflicts when voting on energy policy. (SEC. 2.(a)(3))
Enforcement and Fine Print
Violations come with a hefty price tag – up to $100,000 per infraction, enforced by the Attorney General or Special Counsel. (SEC. 2.(c)) There's also a tax break: Members and their families can defer capital gains taxes on the assets they're forced to sell, provided they reinvest in approved assets within 60 days. (SEC. 2.(d))
The House and Senate Ethics Committees are tasked with figuring out the nitty-gritty details and providing guidance on any vague terms in the bill. (SEC. 2.(e))