Bill Banning Members of Congress and SCOTUS From Stock Trading Takes Shape

Long-anticipated legislation that would ban lawmakers and other senior government officials from trading stocks got a boost on Sept. 22, as House Democrats released a legislative framework seeking to close loopholes, cut conflicts of interest, and make penalties for noncompliance more painful.

Rep. Zoe Lofgren (D-Calif.), chair of the Committee on House Administration tasked with reviewing deficiencies in the current financial disclosure system, outlined the framework in a Sept. 22 letter to fellow Democrats.

“Following that review, I believe that a meaningful and effective plan to combat financial conflicts of interest could help restore the public’s faith and trust that our public servants act in the public interest,” Lofgren wrote.

‘Are Our Public Officials Acting in the Public Interest?’

Pressure has been building for some time to reform the current financial disclosure system after media scrutiny of potential conflicts of interest in trading by U.S. government officials and their families. A recent analysis found that over a three-year span, nearly one-fifth of members of Congress or their family members bought or sold financial assets that showed possible conflicts of interest.

“These stories undermine the American people’s faith and trust in the integrity of public officials and our federal government. Members of the public may ask, are our public officials acting in the public interest or their private financial interest?” Lofgren wrote.

The new framework, titled “Combatting Financial Conflicts of Interest and Restoring Public Faith and Trust in Government,” would entail reforming the Stop Trading on Congressional Knowledge Act, or STOCK Act, which was passed in 2012 and allows lawmakers to trade stocks but requires them to disclose such transactions.

One problem with the current disclosure system is paper-based filing that has, at times, seen forms that are practically illegible. The framework addresses that by proposing that all individuals subject to the disclosure