House passes congressional stock ban, Senate clash looms
The US House has passed a bill banning lawmakers from buying stocks, but exemptions for existing holdings face stiff Senate opposition, leaving the rules governing congressional market participation in flux.
The US House of Representatives passed the Stop Insider Trading Act in a 232-198 vote on Wednesday, prohibiting members of Congress, their spouses, and dependent children from purchasing publicly traded stocks.
The legislation targets the intersection of public policy and private markets by imposing financial penalties for violations. Representative Bryan Steil, the bill's sponsor, said it “ensures no lawmaker can profit off of insider information” and “institutes strict penalties for any violation.”
“We have not had a bill on the House floor on this topic with this opportunity before,” Steil said. “A fine equal to $2,000 or 10% of the transaction, as well as a disgorgement of profits. Violators would be forfeiting any gain realized if they failed to comply with this legislation.”
Crucially for market watchers tracking conflicts of interest, the bill does not mandate the divestment of existing stock holdings. Lawmakers would only be required to provide seven days’ notice before selling assets they already own. This carve-out has drawn immediate criticism from the Senate.
The bill was received in the Senate on Thursday, but Warren’s opposition signals significant legislative hurdles ahead for the measure.
The House vote is part of a broader effort to police how public officials interact with financial markets, extending beyond traditional equities. Steil also sponsored the Stop Lawmakers from Predicting Act in June, applying the same $2,000 or 10% penalty structure to ban lawmakers from wagering on prediction platforms like Kalshi and Polymarket.
Pressure to restrict prediction market access followed high-profile incidents. These included a soldier allegedly making over $400,000 betting on Venezuelan President Nicolás Maduro, who was removed by US forces in January. A Trump teleprompter operator also reportedly earned more than $100,000 betting on Kalshi event contracts tied to words in the president’s speeches.
Separately, the Senate is considering the Digital Asset Market Clarity Act, which takes a harder line on public officials than Steil’s equity bill. The proposed crypto framework would bar all US public officials, including the president and vice president, from issuing or sponsoring tokens until 2029.
