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House Democrats plan to ban lawmakers from trading stocks – report

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U.S House Democrats plan to ban lawmakers from trading stocks next month, Punchbowl News reported on Thursday.

Citing multiple sources, Punchbowl said the ban will be levied on lawmakers, their spouses, and senior staff members.

Members of Congress would be obliged to either divest their investment portfolios or put their assets in a qualified blind trust. Additionally, the proposed legislation would allow them to hold mutual funds.

“We’re almost ready to move forward on this,” House Administration Committee Chair Zoe Lofgren told Punchbowl.

More details about the framework would be released by Democrat leaders in early August.

Why are Democrats banning lawmakers from stock trading?

The aim is to introduce legislation to move through Congress in September, as per Punchbowl’s report. However, it’s unclear if 60 votes would be in favor of the bill.

The Democrats’ decision to ban stock trading by lawmakers comes after it raised concerns. Lawmakers are not subject to insider trading laws given their close connection to stock performance and legislative efforts to boost the economy.

The move has its own set of challenges. If Congress forces lawmakers to put their assets in trusts, they would likely have to employ more staff to approve the trusts.

To prohibit spouses of lawmakers from stock trading would be difficult, especially for members married to those in investment and finance jobs.

Stock trading by lawmakers has become a huge controversial issue in recent years. Both Republicans and Democrats have backed a ban on trading in publicly traded equities. Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer have supported the effort to prevent stock trading.

Nancy Pelosi’s husband sold NVIDIA stock

Nancy Pelosi, who opposed trading on Capitol Hill, exercised millions in call options in big-name stocks in June. Nancy’s husband Paul sold $5 million worth of NVIDIA stock, according to a congressional financial disclosure filed by the speaker.

Paul incurred a total loss of $341,365 by selling the shares. The “questionable” trade was made one day before Congress passed the $54 billion bill. The couple has formerly faced significant criticism from the right about the timing of Paul’s NVIDIA investments.

About the author

Brendan Byrne

While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala.

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