House Republicans ready bill to limit congressional stock trading

House Republicans have scheduled a committee markup for Wednesday on a bill to restrict congressional stock trading, an issue they’ve vowed to address this year.

The Stop Insider Trading Act, released Monday, is not a full stock trading ban, as many lawmakers want, but it would prohibit members of Congress, their spouses and dependent children from purchasing publicly traded stocks.

The bill does not prohibit lawmakers from selling stock they already own, but requires them to provide public notice at least seven days before doing so. For each violation, lawmakers would have to pay a $2,000 fee, or 10% of the investment’s value, whichever is greater, as well as any net gains from the sale.

House Administration Chairman Bryan Steil, Wisconsin Republican and lead sponsor of the bill, said the change is needed to restore the public’s trust in their elected officials.

“The American people deserve to know their member of Congress is not profiting off insider information. The Stop Insider Trading Act ensures that cannot happen,” he said. “If you want to trade stocks, go to Wall Street, not Capitol Hill.”

The measure is broadly supported by House Republicans on the Administration Committee, which will take it up on Wednesday, and others in the conference, including Reps. Chip Roy of Texas and Anna Paulina Luna of Florida, who had been leading efforts to enact a broader stock trading ban.

“This bill is a collaborative product that takes a giant step forward to restore trust by ending stock purchases and forging pre-sale disclosure,” Mr. Roy said.

Mr. Roy was the lead sponsor of a broader stock-trading ban bill negotiated with Democrats, including Reps. Seth Magaziner of Rhode Island, Pramilia Jayapal of Washington and Alexandria Ocasio-Cortez of New York. 

The Democratic trio said the new GOP bill “fails to deliver the reform that is needed and instead protects the wealthiest members of Congress by allowing them to continue to hold and sell stocks.”

“Members can still act on legislation, investigations and briefings that directly influence the value of their stocks for personal benefit,” they said.  

House Speaker Mike Johnson and Majority Leader Steve Scalise, both Louisiana Republicans, have promised a floor vote on the legislation soon after it clears the committee.

“This legislation represents an important step in our efforts to restore the people’s faith and trust in Congress,” Mr. Johnson said. “Both Republicans and Democrats will have an opportunity to make their voices heard and affirm their support.”

Ms. Luna had filed a discharge petition to force a vote on the broader, bipartisan stock-trading ban. The petition was short of the 218 signatures needed, but it prompted GOP leaders to work with her and others on the compromise measure.

“This is a win, but it should be noted that this would not have happened if individual members, both Democrats and Republicans, had not stepped forward to call this out on both sides,” she wrote on social media. “I look forward to reviewing the full text, but based on the toplines discussed over the past few weeks, this is a step in the right direction, and I look forward to supporting it on the floor.”

It’s unclear whether any Democrats will support the Republicans’ bill, which is meant to serve as an intraparty compromise.

House Minority Leader Hakeem Jeffries, New York Democrat, called the measure “watered down.” He said his caucus will discuss it after the committee markup, where Democrats will likely try to amend it.

Mr. Jeffries reiterated his desire to apply the stock trading restrictions more broadly to include officials in the other two branches of government.  

“We need real anti-corruption measures to deal with challenges that we have in the Congress, in the Supreme Court and certainly as it relates to this administration, the most corrupt administration in American history,” he said.

Correction: This story was corrected to note that the fee only applies to sales in which the public notice requirement is violated.