House Democrats will propose legislation early next month to ban lawmakers, their spouses and senior staff from trading stocks unless they put their assets in a qualified blind trust.
Insider reported the legislation, to be introduced in September, would force a divestment of their investment portfolio if the lawmaker, their spouse or a senior staff member chooses not to use such a trust. The bill would allow them to hold mutual funds.
House Administration Committee Chair Zoe Lofgren (D-Calif.) told Insider they were “almost ready to move forward” on the legislation.
The House has already introduced several other bills that would ban, prohibit or limit stock purchases for lawmakers. House Speaker Nancy Pelosi (D-Calif.) tasked the Administration Committee with exploring the idea of overhauling stock trading rules earlier this year.
Pelosi, who last year said she did not support a stock trading ban, changed her mind in February and said she “would like to see it done.”
Her husband, Paul Pelosi — who just sold off his shares of Nvidia ahead of a Senate vote on a bill to bolster U.S. production of semiconductor chips — has been accused of using nonpublic information for stock purchases, which the Speaker has denied.
During an April hearing with the Administration Committee, Rep. Rodney Davis (R-Ill.) questioned the idea of the blind trust proposal, arguing they were expensive to set up and maintain and could hurt less wealthy lawmakers.
“The choice for those who are not independently wealthy is going to be limited compared to those who are wealthy and can afford a qualified blind trust,” Davis said.
The legislation to be proposed next month would reportedly mirror a Senate bill introduced in February, the Ban Congressional Stock Trading Act.
The Senate bill would require all sitting members of Congress, as well as their spouses and children, to divest from investments or place their assets in a qualified blind trust within 120 days of the bill’s enactment.
Under the STOCK Act of 2012, members of Congress are prohibited from using nonpublic information obtained from their job as a lawmaker to make decisions on the stock market.
But questions have been raised about the enforcement capabilities of the STOCK Act because some lawmakers do not robustly report their financial trades.
The issue became more prominent after authorities began investigating Sen. Richard Burr (R-N.C.), who sold off his stock investments in February 2020 after receiving classified information about the COVID-19 pandemic.