PELOSI Act Proposes Ban on Congress Members and Spouses Trading Individual Stocks, Mandates 180-Day Divestment

The "Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act" aims to significantly change how Members of Congress and their spouses handle their personal investments. At its core, this bill would prohibit them from holding, buying, or selling specific types of investments—what the bill calls "covered financial instruments"—during the Member's term in office. If this passes, they'd have 180 days from the law's enactment, or from when they start their service, to sell off any such existing investments. The main idea is to tackle potential insider trading and the appearance of conflicts of interest head-on.

What's On the Chopping Block (and What's Not)?

So, what exactly counts as a "covered financial instrument"? Think individual stocks, security futures, and commodities. The bill, in Section 13161, casts a wide net here. However, it’s not a total ban on all investing. Lawmakers and their spouses could still invest in things like diversified mutual funds, exchange-traded funds (ETFs – those baskets of stocks you often hear about), and U.S. Treasury bills, notes, or bonds. The thinking here seems to be that these types of investments are broad enough not to pose the same conflict-of-interest risks as owning shares in a specific company. Also, any money a spouse or dependent child earns from their main job is explicitly excluded from these restrictions.

Keeping Everyone Honest: Certification and Fines

To make sure these rules are followed, the bill lays out a few accountability measures. Under Section 13163, Members of Congress would need to formally certify in writing each year to their respective supervising ethics committee that they're playing by these new rules. And this isn't just a private note; these certifications would be published on a public website for anyone to see. The ethics committees themselves (as per Section 13164) get the job of enforcing all this. They'll be able to issue guidance, make sure those certifications get published, and, importantly, hand out civil fines if someone doesn't comply. The proposed fine is pretty hefty: 10 percent of the value of whatever investment wasn't properly divested. There's an appeals process for these fines. To add another layer of oversight, Section 13165 mandates the Government Accountability Office (GAO) to conduct an audit within two years of the Act's passage to check how well Members are complying. This is all about adding teeth to existing ethics rules found in Chapter 131 of title 5, United States Code, and making the system more transparent.