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SCOTUS and Members of Congress Prohibited From Trading Stocks Under a New Framework that Includes a Crypto Clause

If a law receives enough support, members of the US House of Representatives, Senate, and Supreme Court who are already trading cryptocurrencies may have to give up HODLing while in office.

Congress can prevent senior government officials, including Members of Congress and the Supreme Court, and their spouses and dependent children from trading stock or holding investments in securities, commodities, futures, cryptocurrency, and other comparable investments, as well as from shorting stocks, in order to restore the public’s faith and trust in their public officials and ensure that they act in the public interest, rather than their private financial interest.

According to a framework made public on Thursday, Committee on House Administration chair Zoe Lofgren claimed to have a “meaningful and effective plan to combat financial conflicts of interest” in the US Congress by limiting the financial activities of legislators, SCOTUS justices, as well as their spouses and kids. The Stop Trading on Congressional Knowledge Act, or STOCK Act, which was passed in 2012 and allows members of Congress to buy, sell, and trade stocks and other investments while in office while also requiring them to disclose such transactions, would be repealed if the bill were to be passed as written.

She added:

According to the STOCK Act, legislators must record any investment above $1,000 that they buy, sell, or exchange within 30 to 45 days of the transaction, although there are very little financial and legal repercussions for failing to file on time, often as low as a $200 late charge. The proposed framework included increasing the late charge to $500, imposing fines of $1,000 for each 30-day period that someone violated the disclosure regulations, and granting the Department of Justice the right to file civil lawsuits as needed. The House could take up the proposed legislation as early as next week, according to a tweet from the House Press Gallery on Thursday.

“I’ll be releasing the legislative language for a bill based on this reform framework very shortly. Many lawmakers have already reached this conclusion.
According to the framework, legislators and Supreme Court justices could still maintain and report a portfolio of diversified mutual funds, exchange-traded funds, Treasury bills, and other investments that “did not provide the same potential for conflicts of interest.”” The bill’s framework also suggested that disclosure numbers be made public and more specific than the “very broad” range now employed — for instance, from $5 million to $25 million.

Similar STOCK Act amendments were put out by Senators Jon Ossoff and Mark Kelly in January, but the legislation hasn’t moved for more than eight months. Nancy Pelosi, the speaker of the House, entrusted the committee with looking into potential financial conflicts of interest in Congress, according to Lofgren. The speaker, however, previously resisted attempts to forbid politicians from holding or trading stocks, arguing that “they should be free to participate in that.”

News Summary:

  • SCOTUS and Members of Congress Prohibited From Trading Stocks Under a New Framework that Includes a Crypto Clause
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