Kevin McCarthy says he will PROHIBIT lawmakers from trading stocks if Republicans take majority

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Kevin McCarthy says if Republicans retake a majority in the House next year he is considering instituting a ban or limit on lawmakers’ ability to purchase and trade stocks after Nancy Pelosi came out against such rules on members of Congress.

The House minority leader told Punchbowl News in their Tuesday morning newsletter that the plan is in its early stages, but one idea includes only allowing lawmakers to hold professionally managed mutual funds.

The push for a ban on trading and holding stocks has escalated in recent months after concerns came up regarding a slew of market activity from lawmakers following an early 2020 briefing on the threat of COVID-19 before the public was privy to that information.

The accusations prompted Justice Department investigations into the financial activity of Senators Dianne Feinstein, James Inhofe and Richard Burr, as well as former Senator Kelly Loeffler. All four probes have since been closed and none of the lawmakers who engaged in stock activity following that briefing have been charged with any wrongdoing.

The idea has also gained more traction after Pelosi came out against regulation on lawmakers’ market activity after her husband Paul, 81, last month bought millions in stocks.

Currently under the 2012 Stop Trading on Congressional Knowledge Act (STOCK Act) lawmakers and their aides are prohibited from using non-public information for private profit, including trade and holding stock. It also requires them to publicly disclose stock and bond transactions within 45 days.

Otherwise, there are few guardrails in place on Congress’ private dollars. 

House Minority Leader Kevin McCarthy says he is considering legislation that would limit or ban lawmakers’ stock activity if Republicans retake the majority in the 2022 midterms

House Speaker Nancy Pelosi (right) came out against such regulations just days before it was revealed that her husband Paul (left) traded millions of dollars in tech stocks

The new proposals would further restrict trading and holding individual stocks, especially as representatives and senators often hear sensitive or confidential information regarding U.S. policy that could impact the markets.

One proposal Republicans are considering, according to McCarthy, include banning lawmakers from holding stock in companies or industries in which their respective committees oversee.

Some lawmakers have pushed for mandatory blind trusts for all members’ holdings.

Freshman Democratic Senator Jon Ossoff, 34, is also reportedly looking into proposals that would ban members and their families from participating in the stock market for the duration of their congressional term.

A similar bill to Ossoff’s was introduced in the Senate in March, the Ban Conflicted Trading Act. However, its trading ban only extends to members of Congress and their staff, excluding Ossoff’s limits on spouses and other family members.

Ossoff, the youngest sitting member of the Senate, is likely to face powerful opposition within his own party, especially after Pelosi spoke out against the measure. His bill would also specifically affect her husband’s prolific trading activity.

Georgia Senator Jon Ossoff, 34, is one of 10 lawmakers to put their financial assets in a blind trust. He is considering a bill that would ban individual trading of lawmakers and their families during a congressional term

Paul Pelosi traded millions of dollars in individual stock trades just last month alone. In December, the House Speaker’s husband bought shares in Google’s parent company Alphabet, Disney, Roblox and Salesforce, among others.

‘We’re a free market economy,’ Pelosi told reporters during a news conference on December 15. ‘[Lawmakers] should be able to participate in that.’

Two days later, Paul bought stock in Alphabet worth between $500,001 and $1 million. He also bought shares in Disney worth between $100,001 and $250,000.

Three days after that on December 20, he made two separate purchases in Salesforce – one worth between $100,001 and $250,000 and another between $500,001 and $1 million, and one purchase of Roblox worth between $250,001 and $500,000.

On December 21, he purchased stock in Micron Technology worth between $250,001 and $500,000 and on December 22, there was a purchase of Reoff XX worth $50,001-$100,000.

Over the course of five days, Paul Pelosi purchased stock worth anywhere between $1,750,007 and $3,600,000.

Paul Pelosi has proven himself a prolific stock trader, so much so that social investing app Iris allows users to track their trades and be notified every time he makes a purchase so that they can do the same.

Pelosi’s periodic transaction report reveals her family is making millions of dollars while she’s in Congress

Ossoff is also one of only 10 lawmakers of the current 535-voting member Congress to put his financial assets in a qualified blind trust, a Congressionally-approved arrangement where a lawmaker transfers control over their assets to an independent entity.

His planned legislation, according to the Post, could force his colleagues to do the same.

As many as 49 legislators and 182 Congressional staffers were found to have violated the STOCK Act by reporting their trades late from January through September 2021.

Throughout 2020, 220 representatives and senators, around 40 per cent of Congress, held a combined sum of $225 million in stock assets.

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