Should Congress Be Banned From Trading Stocks?

July 31, 2025 1

A Senate panel advanced a bill to combat insider trading, but full passage is far from certain.

Should members of Congress, who regularly get briefings on major global developments before the public hears about them, be legally permitted to trade individual stocks? Or should that kind of insider knowledge come with restrictions on their ability to invest?

Americans who take the latter position may be happy to learn that a key Senate committee has narrowly voted to send legislation prohibiting federal lawmakers from buying, selling or owning individual stocks to the full Senate for a vote.

The Senate Homeland Security and Governmental Affairs Committee on Wednesday voted 8-7 to send the bill to the floor for a vote. All Democrats voted in favor. All Republicans except Sen. Josh Hawley of Missouri voted against.
Before doing so, the panel made the legislation also apply to the next president and vice president, effectively a carve-out for President Donald Trump. And they changed the name of the measure.
Hawley, the bill’s original author, had cheekily introduced it as the Preventing Elected Leaders from Owning Securities and Investments (PELOSI), a nod to GOP accusations that Democratic Rep. Nancy Pelosi’s husband’s extensive trading relied on insider information. No evidence has emerged to support that allegation.

Lawmakers are already bound by a 2012 law, the STOCK Act, that bans trading anchored in insider information and requires regular disclosures of transactions. But it’s regularly flouted, and the punishments it envisions are not that robust.

Pelosi Comes Out In Favor

Pelosi, former speaker of the House, came out in favor of the legislation, now dubbed the HONEST Act for Halting Ownership of Non-Ethical Securities and Trusts.

“If legislation is advanced to help restore trust in government and ensure that those in power are held to the highest ethical standards, then I am proud to support it – no matter what they decide to name it,” she said in a statement.

Her endorsement came shortly after Trump said she “should be investigated” for insider trading. The president also said he favors the bill “conceptually” but stopped short of a full endorsement. Where he ultimately comes down will weigh heavily on the fate of the legislation.

And Trump also attacked Hawley as a “second-tier senator.”

Source: https://www.usnews.com/news/u-s-news-decision-points/articles/2025-07-31/should-congress-be-banned-from-trading-stocks

Written by: Joshua Stuart

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