U.S. Rep. Chip Roy (R) and Rep. Seth Magaziner (D) have introduced a new historic bipartisan legislation, the Restore Trust in Congress Act. The legislation seeks to prohibit members of Congress and their families from taking part in insider trading.
"It's far past time to ban members of Congress from day trading stocks and for the first time, a bipartisan coalition is standing together behind a united proposal to do just that," Roy said in a statement. "The Restore Trust in Congress Act ensures that members of Congress will no longer be able to put the stock market first in their offical decisions."
The legislation conjoins multiple previous efforts and creates a clear, enforceable framework. It bans members of congress, their spouses, and dependent children from buying, selling, or owning individual stocks. Exceptions include mutual funds, U.S. bonds, and certain family trusts.
"This bill strikes a balance between being easy to comply with, but without tons of loopholes for Members to continue trading while on the job," Roy noted. "I look forward to seeing the Restore Trust in Congress Act move through the legislative process."
Current members would have 180 days to divest while newly elected members would have 90 days. To ease transitions, members can defer capital gains taxes through a certificate of divestiture, which is similar to existing rules for executive branch employees.
Violations will carry a fine of 10% of the asset's value plus disgorgement of profits. Fines must be paid personally without the help of campaign or official funds.
The bill has garnered support from a bipartisan group of members including Pramila Jaypal (D), Alexandra Ocasio-Cortez (D), Brian Fitzpatrick (R), Anna Paulina Luna (R), and Tim Burchett (R). All of which spoke at a recent press conference to discuss the bill.
If passed, the Restore Trust in Congress Act would mark a historic shift in how congress polices its own financial conduct.
