House Administration Committee reports H.R.7008 as amended after debate over loopholes; final roll call 7–4

The House Administration Committee on [date not specified in the record] voted to report H.R.7008, the Stop Insider Trading Act, after adopting an amendment in the nature of a substitute and approving the bill as amended by roll call, 7–4.

Chairman Stahl opened the markup by saying "no member of Congress, regardless of party or senior seniority, should be profiting off of insider information," and described the bill as a tightening of the STOCK Act of 2012 that would prohibit members from acquiring securities of publicly traded companies while allowing investments in broadly diversified vehicles such as mutual funds.

Ranking Member Morelli urged a stronger approach. "I strongly support a ban on federal officers including members of congress, the president, vice president, and judges and justices of the federal judiciary trading individual stocks," he said, and announced Democratic amendments aimed at closing what he called a "grandma loophole" that would let spouses or dependent children trade on behalf of others.

Committee debate centered on several recurring concerns. Democrats argued the bill leaves major gaps: it permits members to retain pre‑existing holdings and to reinvest dividends (which some members said can amount to additional purchases), does not cover private‑company stock, commodities or certain digital assets unless expressly added, and—according to proponents of broader language—does not include the president or the judiciary. Rep. Sewell said, "This bill doesn't stop insider trading. It is riddled with loopholes," and sought to add the president and vice president to covered individuals.

Managers of the bill defended the text as a bipartisan compromise intended to stop profit from inside information without discouraging private‑sector candidates from serving. The chair noted that the bill "allows individuals who've had successful careers in the private sector to come to Congress" and argued safe harbors and occupational exceptions (for example, spouses who trade in the ordinary course of employment) were necessary to avoid undue hardship. The chair said the legislation would raise penalties from the current statutory civil fine for STOCK Act violations (noted in the hearing record as $200 under prior law) to a higher framework: failure to comply would result in a fine equal to $2,000 or 10% of the covered assets, whichever is greater, and any net gain realized would be forfeited, and sales of pre‑existing holdings would require public notice at least seven days before the sale.

The committee considered many amendments. Representative Morelli’s substitute to replace the text with the Restore Trust in Government Act, which would have required divestiture and broader coverage, failed on a recorded vote. A separate amendment to prohibit reinvestment of dividends was debated and rejected on a roll call. Rep. Sewell’s amendment to add the president and vice president to covered individuals was debated and defeated after recorded votes. Floor managers repeatedly said they would be willing to work on broader fixes between committee and floor consideration rather than derail the bipartisan underlying text at markup.

The committee adopted the amendment in the nature of a substitute and then voted on the motion to order H.R.7008 as amended favorably reported to the House. The roll call shows the following recorded votes: Chairman Stahl (aye); Miss Lee (aye); Mr. Loudermilk (aye); Mr. Griffith (aye); Mrs. Vice (aye); Mr. Carey (aye); Miss Miller (aye); Mr. Morelli (no); Miss Sewell (no); Missus Torres (no); Miss Johnson (no). The clerk reported the tally as 7 ayes and 4 noes; the committee ordered H.R.7008 as amended favorably reported to the House.

The committee instructed staff to make technical and conforming changes and adjourned. The recorded proceedings show continuing disagreement about the scope of any congressional trading ban — whether the objective should be to bar new acquisitions only, to require full divestiture, or to extend coverage to executive and judicial officials — and floor managers signaled an intent to refine language ahead of House floor consideration.

What the record shows: H.R.7008 as amended would ban the acquisition of individual securities by covered individuals while permitting diversified funds; require seven days' public notice before sale of pre‑existing holdings; create higher fines and forfeit realized gains; and include occupational exceptions for spouses or dependents working in certain capacities. Several Democratic amendments to expand scope or require divestiture were offered and defeated in committee votes.

The next procedural step is for the committee to file its report to the full House and for House leadership to schedule floor consideration, if and when they choose to do so.