HR-9560-119
Referred to the Committee on Oversight and Government Reform, and in addition to the Committees on House Administration, the Judiciary, and Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Sponsored by Kristen McDonald Rivet (D-MI)
What it does
This bill would prohibit Members of Congress, federal judges, the President, Vice President, senior political appointees, and their spouses and dependent children from owning or trading individual stocks, commodities, futures, and similar investments, with exceptions for diversified mutual funds, blind trusts, Treasury bonds, and small business interests. Covered officials would have 90 days to divest or place holdings in a qualified blind trust, and violations would trigger a fine equal to 10% of the investment's value plus disgorgement of profits.
Who benefits
The general public and voters seeking assurance that officials are not trading on nonpublic information; watchdog and ethics organizations; financial markets broadly, which may see reduced perception of insider advantage; diversified fund managers and index fund providers who would gain business from officials shifting assets into permitted vehicles; and potentially the officials themselves in terms of reduced legal and reputational risk from conflict-of-interest scandals.
Who is hurt
Members of Congress, judges, political appointees, and their spouses and dependent children who currently hold individual stocks or actively trade would be forced to divest, potentially at a financially disadvantageous time, or lose the ability to manage their own investment income. Spouses employed in finance-related fields could face career limitations despite the occupational exception. Officials with concentrated family business or investment holdings not covered by exceptions could face liquidity or valuation challenges upon forced divestiture within 90 days.
Supporters argue
Supporters argue that lawmakers and judges have repeatedly been shown to trade stocks in industries they regulate or hear cases about, creating conflicts of interest and public distrust, citing numerous news investigations into congressional stock trades outperforming the market and timed around policy actions. They contend that banning individual stock ownership removes both the appearance and the possibility of officials profiting from nonpublic government information, restoring confidence that public service is not a vehicle for personal financial gain.
Opponents argue
Opponents argue that a blanket ban intrudes on the financial autonomy of officials and their family members, including spouses and adult dependents who have their own careers and investment decisions unrelated to government work. They contend that forced divestiture within 90 days could impose real financial losses unrelated to any wrongdoing, and that existing disclosure requirements and conflict-of-interest recusal rules already address the underlying concern without requiring officials to liquidate lawful property.
Constitutional context
Congress has broad authority under Article I to regulate the conduct of its own members and to set ethics rules for federal officials, and Article III does not shield judges from generally applicable conduct requirements imposed by statute. The mandatory divestiture provision could raise Takings Clause and Due Process Clause questions if forced sales occur at a financial loss, though courts have generally upheld conflict-of-interest and financial disclosure rules against such challenges when tied to a legitimate government interest in preventing corruption.
Checks and balances
Congress would gain authority to impose binding financial conduct rules on itself, the judiciary, and the executive branch's political appointees, with enforcement delegated to supervising ethics offices (including the Judicial Conference for judges and the Federal Election Commission for candidates), raising separation-of-powers questions about legislative regulation of judicial and executive branch officials' personal finances.
Historical precedent
The STOCK Act of 2012 required Members of Congress and other officials to disclose stock trades within 45 days but did not ban individual stock ownership or trading outright, making this bill a more restrictive extension of that disclosure-based approach.