Halting Ownership and Non-Ethical Stock Transactions (HONEST) Act, a bipartisan measure that targets the subject of insider trading among public officials, is gaining momentum after it stalled in the Senate since July.
According to the official documents, the bill aims to ban members of Congress, the president, vice president, and their immediate family members (spouses and dependent children) from trading, or holding individual stocks, bonds, commodities, or futures during their time in office.
The ultimate goal is to finally get rid of conflicts of interest and the appearance of insider trading, where lawmakers could potentially use non-public information from briefings or committee work to profit personally.
Can Congress members still trade stocks?
At the time of this writing, the bill has not yet reached the full Senate floor and Senate Majority Leader John Thune (R-SD) has expressed doubts about prioritizing it, citing concerns from business-oriented Republicans that it could deter entrepreneurs from running for office.
However, recent developments prove momentum is building. In September of this year, a companion House bill, the Restore Trust in Congress Act (H.R. 5106), was introduced by Reps. Chip Roy (R-TX) and Seth Magaziner (D-RI).
The bill is said to be a reconciled version of previous proposals stalled by differences in the details and a lack of support from top congressional leaders. It has reportedly gotten the support of Speaker Mike Johnson (R-LA), who issued a public statement expressing his support for a stock trading ban.
Roy told reporters around that time that the bill was the result of years of negotiations aimed at addressing demands from voters worried about insider trading.
In announcing the new bill, a group of leading conservatives and progressives are saying the issue is ripe for action in 2025 and that they had agreed on a new plan.
“They do not send us here to enrich ourselves while we are voting on the issues they send us here to fix and address and then have members who are trading stocks on the very issues they’re supposed to be voting on,” Roy said.
The legislation would require lawmakers to sell all individual stocks within 180 days, and newly elected members of Congress would be required to divest individual stock holdings before being sworn in.
Members who fail to divest would face a fine equivalent to 10% of the value of the stock. The proposed ban extends to spouses and dependent children.
Opposition to the insider trading bill remains strong
Despite the moves, advocacy groups like the Campaign Legal Center have claimed that 44% of House members and 54% of senators still own individual stocks, creating ongoing conflict risks.
Opposition remains from the likes of Sen. Ron Johnson (R-WI), who called it “legislative demagoguery” and argued that existing insider trading laws suffice, warning it could make public service “unattractive” for business owners.
The recent push is happening amid scandals involving public officials and their conflicts of interest, which have seen some like Rep. Byron Donalds (R-FL) face complaints for failing to disclose 100+ trades worth up to $1.6 million.
Donalds has said he plans to support a stock trading ban for members of Congress, but for some reason would like to keep his broker. While discussing the issue with the Fox News radio affiliate in his district, the Naples Republican, who is running for Governor said that “when it comes up for a vote, I’m voting for it. I have always been opposed to members trading positions.”
Despite that statement, he said he believes members should still be allowed to own stocks, just not to direct trades.
“Let me just get it out there because I know people say, ‘Well, Byron, you own stocks.’ I do, but my stocks are traded by my financial advisor, Tom Moran, in Naples. They’ve been my financial advisor since I got to Congress. I actually worked there before I got to Congress. I do not initiate trades. That is done by my broker, (and) he has third-party authorization to trade on my behalf. We have no contact about this stuff,” Donalds said.
Donald Trump is also not completely on board with the idea. In the past, the president has framed it as an attack on his “unprecedented success” while going after the only Republican to support the bill back in July, labeling him a “pawn” and “second-tier Senator” for aligning with Democrats.
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Source: https://www.cryptopolitan.com/republican-insider-trading-bill-advances/
