the staff of the Ridgewood blog
WASHINGTON, D.C. — For years, more than 100 members of Congress have reported around 10,000 stock trades annually, often posting returns that outperform the market. Now, growing public outrage over potential conflicts of interest has pushed legislation to ban Congressional stock trading one step closer to reality — but the fight is far from over.
How Lawmakers Consistently Beat the Market
From 2021 to today, some lawmakers have executed perfectly timed trades in industries they directly oversee.
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Former House Speaker Nancy Pelosi (D-CA) made trades while the CHIPS and Science Act was being negotiated.
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Members on national security committees purchased defense stocks ahead of key legislation.
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Others traded medical device shares while serving on health committees.
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In 2024, multiple lawmakers traded social media company stocks while Congress debated the TikTok ban/divestment bill.
While insider trading laws technically apply to Congress, the 2012 STOCK Act only requires trades over $1,000 to be disclosed within 45 days — and does not prohibit buying or selling stocks tied to legislation or industries they oversee.
The Push for a Ban
A bipartisan Senate bill, passed out of committee in July, would ban members of Congress, their spouses, and even future presidents and vice presidents from trading individual stocks. Similar legislation stalled in 2024 before reaching a full Senate vote, and former President Donald Trump has voiced opposition.
Meanwhile, Rep. Josh Riley (D-NY) has introduced the Ending Trading and Holdings in Congressional Stocks (ETHICS) Act, co-sponsored by Reps. Raja Krishnamoorthi, Michael Cloud, Alexandria Ocasio-Cortez, Joe Neguse, and Jen Kiggans. The bill would prohibit members, their spouses, and dependent children from owning or trading individual stocks, securities, commodities, or futures.
“If you’re in Congress, you should focus on serving the people, not yourself,” Riley said. “Upstate New York knows what it’s like to be sold out by greed on Wall Street and corruption in politics.”
Frank Pallotta’s 2022 TRUST Act Proposal
Former congressional candidate and Wall Street veteran Frank Pallotta warned years ago that superficial reforms would fail. His TRUST Act called for:
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Mandatory qualified blind trusts for all members of Congress.
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Oversight by independent panels of financial experts.
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Strict limits on investments tied to potential conflicts of interest.
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Extending rules to family members, staffers, and close associates.
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Severe penalties for violations, including removal from office.
Pallotta argued the real danger goes beyond insider trading — it’s about lawmakers shaping legislation to benefit personal or connected investments.
Overwhelming Public Support for a Ban
A 2023 Nielsen survey found 86% of Americans support banning members of Congress from trading individual stocks, with the most convincing reason being that there are too many conflicts of interest for elected officials to trade freely.
Yet despite mounting pressure, Congress has repeatedly failed to act — and each delay fuels more skepticism that lawmakers will ever vote to limit their own financial opportunities.
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