WASHINGTON, D.C. — House Republican leadership has introduced the so-called Stop Insider Trading Act. Despite its name, the proposal is not a stock or insider trading ban at all, and it fails to meet even the most basic standards for meaningful reform. It allows members of Congress to keep their existing stock holdings, and even worse, it allows them to invest and trade in cryptocurrency, commodities, and other speculative investments like private funds, venture capital funds, and hedge funds—precisely the kinds of assets that can be used to hide conflicts of interest.

“This new proposal is not a stock ban; it is a permission slip for continued corruption,” said Virginia Canter, Anticorruption and Ethics Chief Counsel at Democracy Defenders Action. “By allowing members to hold individual stocks and speculate in commodities and cryptocurrency, this bill ignores the fundamental problem that close to 90% of the American people want Congress to address: when members own interests in companies they regulate or fund with appropriated monies, we are forced to wonder whether they’re making policy in our interest, or in the interest of their own pocketbook.”

DDA has been very clear: any congressional stock ban bill must ban members of Congress from owning or trading all individual financial interests; and it must apply to members, their spouses, and their dependent children. This bill fails these tests.

The legislation fails to address member conflicts of interest because it permits lawmakers to maintain direct investments in individual corporations. The bill would also allow members to freely speculate in commodities markets, including oil and gas futures–and freely buy and sell cryptocurrencies like bitcoin. Because these markets are highly volatile and market sensitive in response to government activity, they create the potential for massive conflicts of interest. The bill would also enable members to invest in non-diversified funds, including hedge funds, venture capital funds, and private equity funds that concentrate in the industries regulated by Congress and that may operate without the transparency and oversight of diversified registered investment companies.

The proposed bill applies to members, their spouses, and dependent children – but would appear to allow spouses to purchase and sell individual stocks for others, including  non-dependent children and other close relatives. This exception undermines the entire point of the legislation.

“We already have a solution to the problem of members owning or trading stocks that has earned the support of over 120 members, including many Republicans,” said Virginia Canter. “Unlike this latest toothless bill, the bipartisan Restore Trust in Congress Act and the related Restore Trust in Government Act, check every box: they ban ownership of stocks, bonds, and crypto; they cover families; and they include meaningful penalties. Congress must stop wasting taxpayer money and time with sham bills and pass legislation that actually fixes this problem.”

DDA strongly urges Congress to reject this latest attempt to hide ongoing corruption, and pass the bipartisan compromise Restore Trust in Congress Act or the Restore Trust in Government Act.

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Democracy Defenders Action brings together a nonpartisan team to work with national, state and local allies across the country to defend in real-time the foundations of our democracy.