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H.R. 7008 would bar members and families from buying individual stocks, tighten notice and penalties
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Summary
An unnamed committee speaker outlined H.R. 7008, the Stop Insider Trading Act, which would bar members of Congress, spouses and dependents from purchasing individual securities, allow diversified mutual funds, require seven days' public notice for certain sales, and raise fines and forfeiture for violations.
An unidentified speaker introduced H.R. 7008, the Stop Insider Trading Act, and outlined its key provisions, saying the bill would bar members of Congress, their spouses and dependent children from purchasing securities issued by publicly traded companies while allowing investments in diversified, widely held products such as mutual funds.
The speaker framed the measure as a corrective to the 2012 STOCK Act, saying that under current law members must "disclose individual trades a month or more after they occurred" and that "the reporting is done in increments rather than exact amounts," a practice the speaker said "can fuel misinformation and sensationalized headlines." The speaker also noted that "violations under the STOCK Act under current law carry a penalty of $200."
Under the stop-insider-trading bill described in the hearing, members who already own stock before taking office may keep ownership but would be prohibited from acquiring additional shares. The speaker said sales of any stock owned prior to joining Congress would require public notice at least seven days before the sale. The bill, as summarized by the speaker, includes a spousal occupational exception for spouses or dependent children who trade as part of their job; the speaker cited examples such as a stockbroker or a life insurance salesperson.
The speaker described the proposed penalties as substantially larger than under current law: "Failure to comply will result in issuance of a fine equal to either $2,000 or 10% of the covered assets, whichever is greater," and any net gain realized from a sale in violation would be forfeited, according to the speaker's summary.
The unidentified speaker characterized the legislation as designed to "eliminate the ability to profit off of insider information" and urged colleagues to "not let partisanship stand in the way of real substantive progress," before recognizing the ranking member, Mister Morelli, for a statement. The transcript provided no formal motion or vote on H.R. 7008 in this excerpt and did not identify the speaker by name.
