US Republican Party Pushes "Stock Ban": Strictly Bans Members of Congress from Buying Individual Stocks, Severely Punishes Insider Trading

House Republicans are pushing a bill to ban members of Congress from purchasing individual stocks, marking significant progress in Congress’s long-standing efforts to curb lawmakers’ profiteering from insider information. The bill has garnered widespread support from Republican leadership and various factions, and is expected to enter committee review this week. According to the Wall Street Journal, Wisconsin Republican Congressman and chairman of the House Administration Committee Bryan Steil led the drafting of the bill, called the "Ban Insider Trading Act," which is scheduled for formal submission on Monday local time. House Speaker Mike Johnson has pledged to arrange a full House vote as soon as possible after committee review. The bill would prohibit members of both the House and Senate from purchasing new individual stocks, but would allow trades in diversified investment funds. Lawmakers are not required to sell their existing individual stock holdings, but if planning to sell, must publicly disclose their intentions 7 to 14 days in advance. Violators will face a fine of at least $2,000 or 10% of the transaction amount, and may be required to return profits. This legislation marks the first substantive breakthrough on Congressional stock trading restrictions since Congress passed the STOCK Act in 2012. Although there have been numerous attempts to impose stricter trading restrictions before, none succeeded, while this proposal enjoys broad bipartisan and voter support. Increased Penalties for Violations The bill prohibits lawmakers from buying individual stocks while still allowing trading in diversified investment funds. There is no mandatory sale of existing holdings, but a compulsory pre-disclosure mechanism is established: if a lawmaker plans to sell specific stocks, he or she must submit a public notice no less than 7 days, and no more than 14 days before the planned sale. If they change their mind, the notice can be withdrawn before the specified date. The proposal greatly increases the penalties for violations, including a percentage deduction from the transaction amount and profit recovery. If a representative violates the rules, the House Ethics Committee will impose a fee of either $2,000 or 10% of the investment value (whichever is higher), and possibly recover all profits. Spouses and minor children are also restricted from purchasing publicly traded company securities. There are some exceptions, including certain small business interests, specific investments held in trusts, compensation from employment received by spouses or children, or if their primary occupation is managing trades or funds for others. The legislation does not cover other types of investments such as bonds or commodities. Republican Consensus The bill enjoys the full support of House Republican leadership. Speaker Johnson stated: "No member of Congress should be allowed to profit from insider information. This legislation is an important step in restoring people’s trust in Congress. Both Republicans and Democrats will have the opportunity to express their opinions and show their support." House Majority Leader, Louisiana Republican Congressman Steve Scalise, said: "I have worked closely with Chairman Steil, who has been relentless in drafting a bill to ban stock trading by members of Congress. I hope the bill will be brought to a full House vote as quickly as possible after passing committee." The bill has won endorsement from different Republican factions. Florida Republican Representative Anna Paulina Luna previously pushed the stock ban bill through a discharge petition and is an original co-sponsor of the current bill. Members of the House Freedom Caucus, such as Texas Congressman Chip Roy, and moderate Republicans like New York Congressman Mike Lawler—who previously advocated stricter trading rules—also expressed support. Roy stated: "The public should be able to trust their congressional representatives’ motivations, but some have undermined that trust by getting rich through aggressive stock trading. This bill is a collaborative result and a crucial step toward rebuilding trust." Breakthrough After Years of Effort Congress passed the STOCK Act in 2012, requiring greater disclosure and explicitly banning trades using non-public information. Despite broad support from lawmakers and voters to crack down on trading, members of Congress have struggled for years to implement stricter restrictions. In an interview ahead of the bill’s announcement, Steil said: "I believe we have the opportunity to improve the STOCK Act, especially to address American concerns over lawmakers profiting from insider trading. I not only think this is the best chance, I believe we will ultimately prove ourselves successful." Steil plans to expedite the legislative process, with debate and amendment review of the bill draft as early as this week. House Republican leaders have promised that once committee review is complete, a vote by the full House will be scheduled. This signals the legislature may achieve progress on the long-standing issue of potential conflicts of interest among members of Congress. Risk Warning and Disclaimer The market carries risks, and investment requires caution. 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