Efforts Surrounding Congressional Stock Trading Ethics
A bipartisan effort is underway to address the longstanding issue of unethical stock trading by members of congress. People are questioning whether members of congress should be allowed to trade stocks. Their decision making responsibilities allow them to have the foreknowledge of bidding contracts and the power to enact policy. These duties require them to possess information not readily available to the public. While there are currently some rules in place that put limits on congressional stock trades, there are still loopholes that remain.
Current rules allow trading to occur as long as it is reported within 45 days. This holds regardless if they are presiding over any related policy matters. The Stop Trading on Congressional Knowledge Act (STOCK) of 2012 requires lawmakers to report their trades. The law also prohibits trading using insider non-public information. There are no laws that completely prevent members of the House or Senate from trading stocks even if their policy decisions could influence the stock prices.
Representatives Ken Buck (R) and Joe Neguse (D) from Colorado are spearheading an effort and pushing others to take action with stock trading on the hill. The bipartisan duo are calling for an outright ban on stock trading. They say members of congress should be serving the American people instead of their stock portfolios. Resistance is common on the issue as stock trades are often made on their behalf by financial professionals. Spouses, other family, and associates also become involved in the trading action. More accountability is needed as these actions still constitute taking advantage of loopholes in the system.
Public efforts are also helping to disclose the corruption. The Autopilot app tracks congressional stock trades and copies them for users to easily transact the same stocks. The creator of the app says that immense congressional profiting influenced the creation of the app. While this type of service may level the playing field, there is still public concern of a rigged system. Unusualwhales, another service that tracks congressional stock activity, further says that congressional stock portfolios consistently outperform the S&P 500. Members of congress are also notably apt at avoiding losses. Gains from stocks reach well into the millions by multiple members of congress.
Politicians, like organizations, could also contribute to improving public trust by forthrightly disclosing transactions for public view. A certification from OpenCIV is available to individuals as well. Financial information transparency would also help to identify any conflicts of interest directly related to their position of power. Until the necessary laws pass that reflect the desired ethics or congressional behaviors change, the public should at least potentially benefit from the same strategies that have enabled lawmakers to acquire such large gains in the stock market.
