Senator Ricketts’ Weekly Column: Stop Congressional Inside Trading

Nebraskans deserve elected officials who will put their communities’ interests ahead of their own personal interest.  Every American deserves this.  Insider trading is illegal, period.  Members of Congress aren’t above the law.  But we need to do more to restore Americans’ trust in Congress.  Too many Americans think that their legislators come to Washington to make their wallets fat.

Because of the public trust granted to elected officials, it can be necessary for Congress to know privileged information.  Members occasionally are informed about public companies’ actions early.  Members are given a heads-up on regulatory changes.  Many members sit on committees that regularly handle classified information.  And, of course, we shape the laws and policies that affect every industry in America.  For example, one lawmaker knew early from briefings that the COVID-19 pandemic would hurt financial markets.  He sold his stocks early to avoid a loss from a market downturn caused by the pandemic.

The perception is the same for a legislator’s spouse or child.  Legislators or their families trading stocks can shift markets.  So, investors imitate politicians’ trades because they expect it signals inside information.

That’s why this week I introduced the Stop Insider Trading Act.  Representative Bryan Steil of Wisconsin introduced it in the House.  Our bill eliminates even the appearance of impropriety by prohibiting Members of Congress, their spouses, and dependent children from buying new stock.

If a lawmaker or their family already owns stock as they come into Congress, they can keep it.  However, if Members of Congress or their family wish to sell stock, they must publicly disclose those plans seven to fourteen days in advance.  Doing so allows the public, and the market, to get ahead of any news that could impact a stock’s price.

Our bill also carries significant penalties.  Any violation would incur a $2,000 fine or 10% of a covered transaction — whichever is greater.  Additionally, any profit realized by a sale would also be forfeited.  Under our bill, if a lawmaker sold $1 million in stock without filing advanced public notice, they would be fined $100,000 — plus forfeit any profits.

Nearly 90% of Americans support a reform like the Stop Insider Trading Act.  It’s time Congress made this the standard.

Nebraskans deserve to know their elected officials aren’t profiting from insider information.  So do all Americans.  The Stop Insider Trading Act ensures no lawmaker can profit from insider information.

My team and I are here to serve you.  Contact us anytime by phone at 202-224-4224.  You can also view my website at http://www.ricketts.senate.gov/contact.