Two Democratic senators want to prevent a recurrence of ethically dubious stock trades by members of Congress by banning them altogether.
Sens. Jeff Merkley of Oregon and Sherrod Brown of Ohio want to bar lawmakers and senior aides from buying and selling individual securities. The reality is that many members of the House and Senate do own and trade stock in publicly-traded companies.
“Members of Congress serve the American people, not their stock portfolios,” Brown said in a statement last week. “Elected officials have access to nonpublic information that can affect individual companies and entire industries. There must be more accountability and transparency to prevent members from using this information and abusing their positions for personal gain.”
Brown is the ranking Democrat on the Banking, Housing and Urban Affairs Committee in the Senate.
Merkley and Brown introduced a bill on Thursday that would impose a trading prohibition.
According to the draft text of the legislation, members and members-elect that do not put individual stocks into blind trusts would have to ivest them within six months of enactment or hold them for the duration of their congressional service.
Lawmakers would still be allowed to buy and sell broadly-diversified mutual funds, such as index funds.
The buying and selling of stocks by lawmakers has been more closely regulated since the Stop Trading on Congressional Knowledge Act (STOCK Act) was signed by President Barack Obama in 2012.
Reporting requirements under the law quickly made it clear that some members were trading with regularity.
The Merkley-Brown measure also would block members from serving on boards of public companies. Rep. Chris Collins, R-N.Y., is under indictment on charges connected to trades in the stock of Innate Immunotherapeutics, on whose board Collins served. The Ethics Committee also launched an investigation, but put it on hold pending the outcome of the criminal case.
A complaint filed through the Securities and Exchange Commission accused Collins of gaining personal benefit and providing nonpublic information to his son, Cameron Collins, who sold nearly $1.4 million of the company’s stock.
The legal proceedings against Collins may end up getting into constitutional questions about whether the Speech or Debate clause should allow him to look at grand jury materials that may be related to the separate Ethics Committee investigation of his conduct.
Emily Kopp and Katherine Tully-McManus contributed to this report.