KEY TAKEAWAYS
- The bipartisan legislation proposes stock trading bans for members of Congress, senior White House officials and their spouses and dependents, even through blind trusts.
- More than 80% of Republicans, Democrats, and Independent voters favor a ban, a recent poll shows.
- The current law allows stock trading by members of Congress but requires disclosure, but only about 25% believe that is sufficient, the poll shows.
“Politicians and civil servants shouldn’t spend their time day-trading and trying to make a profit at the expense of the American public, but that’s exactly what so many are doing,” Hawley said in a statement.
Past Stock Trading Bans Bills Have Stalled
Legislators have introduced several bills seeking to institute some form of restrictions on stock ownership by members of Congress, senior White House officials and in some cases, members of the Supreme Court. One bipartisan effort introduced in the House featured co-sponsorship by political polar opposites New York Democratic Rep. Alexandria Ocasio-Cortez and Florida Republican Rep. Matt Gaetz.
Past efforts have stalled, in part because of members’ own defense of the practice, particularly former House Speaker Nancy Pelosi. While the House advanced a bill in 2022, it wasn’t scheduled for a floor vote, nor have Republican leaders moved similar bills forward after the party took control of the House in the 2022 midterm election.
The current laws under the 2012 STOCK Act allow members of Congress and their top staff to trade stock, but it requires them to report their trades and gains. The White House signaled in 2022 that it would be supportive of a ban after a spate of bills banning stock trading for Congress members were introduced.
Public Firmly Behind Stock-Trading Ban for Congress, President
A survey from the University of Maryland’s Program for Public Consultation found an overwhelming majority of individuals of all political persuasions were in favor of banning stock trading for Congress, senior White House officials and members of the Supreme Court.
The survey of 2,625 registered voters between May 19 and May 30 found 88% of Democrats, 87% of Republicans and 81% of Independents were in favor of banning individual stock trading by members of Congress.
“While the prospect of a stock trading ban is controversial within Congress, public support approaches unanimity,” said Steven Kull, director of the program, in a statement.
Only about 25% of respondents found arguments against a Congressional stock ban convincing. Some members of Congress argue a ban could discourage individuals from running for Congress, or that it wouldn't be necessary because the current disclosure rules are sufficient.
Novel ETFs Capture Politicians’ Trading Habits, Support Allies
While many are seeking to prevent members of Congress from buying and selling company shares, a few are looking to cash on the stock trading habits of members of Congress.
Investment advisory firm Subversive Capital Advisor created an Exchange Traded Fund (ETF) that looks at publicly-disclosed stock purchases from prominent politicians. Investors looking to cash in on Democratic lawmakers' stock picks can buy the Subversive Unusual Whales Democratic ETF, under the ticker NANC, or the comparable Unusual Whales Republican ETF, labeled by the ticker KRUZ.
There’s also Reflection Asset Management’s Democratic Large-Cap Core Fund, ticker DEMZ, which steers funds towards Democratic-leading institutions, while the MAGA ETF offers the same opportunity to Republicans.