Republican Rep. Pat Fallon of Texas is pushing legislation that would ban members of Congress and their spouses from trading individual stocks.
According to a copy of the proposal released by the Daily callerThe text of the measure would prohibit lawmakers and their spouses from buying and selling a “covered financial instrument,” which the measure defines as a security “within the meaning of Section 3(a) of the Securities Exchange Act of 1934.”
The measure stipulates that certain vehicles such as mutual funds, exchange-traded funds, U.S. Treasury bills, bonds and notes, and “any mutual fund held as part of a pension plan for federal, state or local government employees” will not be considered a “covered financial instrument.” “
The measure would allow a lawmaker’s spouse to receive a “covered financial instrument” as payment for their work. “Beginning one year after the date on which the spouse of a Member of Congress is employed in that spouse’s principal occupation, such spouse may receive a covered financial instrument as compensation for that principal occupation during the period of employment in that occupation.” The text of the measure reads.
Violators would be subject to a fine of either “US$25,000 per violation” or an amount equal to the value of the financial instrument sold or purchased, whichever is greater.
“There is no doubt that some members seek to use their position to enrich themselves and their families. Even more make honest mistakes as they try to navigate the often confusing reporting requirements. A cottage industry has sprung up in the media that often ignores bad actors and instead calls out innocent failings.” “To put an end to all of this, we should simply pass a law that makes it clear once and for all that incumbent members of Congress overall, trading in individual stocks is prohibited,” Fallon told the Daily Caller.
“The Insider Trading Prevention Act is a critical first step in restoring the public’s trust in Congress. It is clear and easy to understand and will completely eliminate errors of good faith and, more importantly, egregious self-promotion and insider trading,” he remarked to the outlet.
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