House passes bill on lawmakers using insider information for stock trading

The US House of Representatives passed the Stop Insider Trading Act in a 232-198 vote, aiming to prevent members of Congress, their spouses, and dependent children from purchasing publicly traded stocks. The bill requires lawmakers to provide seven days’ notice before selling stocks they already own and enforces penalties including fines of up to $2,000 or 10% of the transaction amount, along with disgorgement of any profits made from illegal trades. The legislation, sponsored by Representative Bryan Steil of Wisconsin, is designed to ensure that no lawmaker profits from insider information and to impose strict consequences for violations.

Despite the bill’s progress in the House, some Democrats, including Senator Elizabeth Warren, have criticized it for not going far enough. They argue that allowing lawmakers to retain and sell existing stock holdings constitutes a significant loophole, and Warren has stated that the bill is unlikely to pass in the Senate as members of Congress should not be allowed to own, buy, or sell stocks at all. The bill was sent to the Senate for consideration on Thursday following its House approval.

The Stop Insider Trading Act differs from another measure under Senate review, the Digital Asset Market Clarity Act, which proposes broader restrictions on public officials including the president and vice president, specifically targeting cryptocurrency token issuance and sponsorship. Additionally, Steil has sponsored a related bill called the Stop Lawmakers from Predicting Act, designed to prohibit public officials and their families from wagering on prediction market platforms such as Kalshi and Polymarket. This bill came amid public attention on notable cases of individuals profiting from political outcome betting on these platforms.

Both bills include penalties similar to those in the stock trading measure. The Senate will now consider the Stop Insider Trading Act, while the fate of these regulations highlights ongoing concerns over conflicts of interest and ethical conduct among US lawmakers in financial markets. The coverage notes the importance of the legislation in addressing insider trading risks but also underscores continuing debates on the sufficiency of its provisions.