By Staff Reporter |
The U.S. House of Representatives passed H.R. 7008, the Stop Insider Trading Act, this week. The legislation is designed to prohibit Members of Congress, their spouses, and dependent children from purchasing individual stocks and certain other financial instruments while serving in office.
Rep. Eli Crane (R-AZ-02), who signed on as a cosponsor shortly after the bill’s introduction, voted in favor of the measure.
Throughout his time in Congress, Crane has advocated for stricter ethics standards and has consistently opposed insider trading by lawmakers, arguing that elected officials should not be able to profit from information obtained through public office.
Crane has also pledged not to trade individual stocks and has previously cosponsored similar legislation aimed at banning the practice.
“Our Founders envisioned a nation where citizen representatives served their constituents, not one where they used their positions to amass personal wealth,” stated Rep. Crane. “This legislation establishes solid guardrails to prevent lawmakers or their families from using insider information to enrich themselves.”
The legislation includes several exceptions, allowing investments in broadly diverted mutual funds and certain U.S.-focused investment funds, interests in qualifying small businesses, and assets held in qualifying blind trusts where lawmakers and their families have no authority over the trustee.
In addition to restricting purchases, the bill establishes new transparency requirements for the sale of covered investments.
Members of Congress would be required to publicly disclose their intent to sell a covert investment between seven and fourteen days before the transaction. The notice would include the anticipated sale date, a description of the transaction, and the number of shares to be sold, with disclosures published online by the Clerk of the House or Secretary of the Senate.
The legislation also outlines enforcement provision for violations. Individuals found to have improperly purchased covert investments would be required to divest those holdings and could face financial penalties of at least $2,000 or 10% of the value of the prohibited transaction, whichever is greater, in addition to forfeiting any net gains realized from the investment.
In certain cases, congressional ethics offices would have authority to refer violations to the Department of Justice.
The bill further prohibits Members of Congress from using official office funds or campaign contributions to pay any penalties assessed under the law.
If enacted, the restrictions would take effect 180 days after the legislation becomes law.
“While I commend my colleagues in the House for passing this bill, it won’t make a difference if our colleagues in the Senate don’t make it a priority,” said Crane. “I’m asking the American people to reach out to their senators and urge them to support this commonsense bill.”
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
