US Congress Pushes Bill to Ban Stock Ownership and Trading by Senior Officials

A bill banning senior officials in the U.S. Congress from owning or trading individual stocks is being promoted.

The Wall Street Journal (WSJ) reported on the 5th (local time) that Republican Senator Josh Hawley plans to introduce such a bill on the 6th to strengthen conflict of interest regulations within the federal government. This move comes in response to reports revealing that more than 2,600 public officials invested in stocks of companies lobbying their affiliated agencies for favorable policies, highlighting investment-related issues across the administration.

According to the bill confirmed by WSJ, senior executive branch officials with certain experience and above a specific pay grade must dispose of or place in blind trusts the stocks owned by themselves and their spouses within six months of assuming their positions. This bill targeting individual stocks does not apply to mutual funds.

Senator Hawley stated, "Senior executive branch officials who have access to confidential information should not use that information to become wealthy," adding, "Although federal laws to prevent conflicts of interest already contain prohibitions, those laws are difficult to enforce and insufficient." He introduced a bill last January to prohibit federal lawmakers and their spouses from owning or trading individual stocks, but after no progress, he reintroduced it this January.

Current federal law prohibits public officials from working on matters in which they have a "substantial financial interest." Additionally, some agencies have strict rules regarding officials' stock ownership and trading. However, WSJ pointed out that most agencies do not practically intervene, allowing free stock trading. It is also difficult to determine which duties specific officials hold and whether they have information that could affect stock prices.

Previously, one-third of senior officials at the U.S. Department of Energy were found to own stocks of companies related to their work, either personally or through family, and were warned. WSJ also reported last fall after analyzing 31,000 financial disclosures from 12,000 senior officials across 50 agencies that one in five invested in stocks of companies lobbying their affiliated agencies. Last week, Senator Elizabeth Warren and others requested internal investigators from eight federal agencies, including the Treasury Department, to initiate investigations into conflicts of interest and review the effectiveness of ethics regulations.