WASHINGTON, D.C. – Congress should pass the Combatting Conflicts of Interest Act, which would ban lawmakers, their spouses, and senior staff from playing in the stock market, Public Citizen said today. The U.S. House is expected to vote on the bill this week.
“Members of Congress have routine access to confidential inside information of public policies that directly and substantially affect the economy – and the stock markets. Yet these same lawmakers buy and sell stocks at whim, often after confidential briefings on the likely spikes and downturns of the economy from information unavailable to the public,” said Craig Holman, government affairs lobbyist for Public Citizen.
In one of the most brazen, but not uncommon, scandals raising suspicions of insider trading, at the beginning of the pandemic U.S. Sen. Richard Burr (R-N.C.) came out of a private briefing with health department officials who confided how COVID-19 would impact the economy. Burr then dumped all his stocks in a single day, a week before the market crash. Burr not only saved himself a fortune; he also informed his brother-in-law in a 50-second conversation, who immediately followed suit.
Congress passed the STOCK Act in 2012, which for the first time made insider trading laws apply to Congress itself. The STOCK Act requires real-time, online disclosure of stock trades by members of Congress and their spouses as a means of enforcing the law. But many members continue to play in stocks, adding to the litany of insider trading scandals.
“The disclosure system of the STOCK Act itself should have prevented members of Congress from insider trading,” said Lisa Gilbert, executive vice president of Public Citizen. “In fact, it resulted in a dramatic reduction of stock trading activity by members of Congress. But it is time to take the next step and ban stock trading activity altogether by members of Congress and their spouses.”