WASHINGTON, D.C. (NewsNation) — A bipartisan effort to curb insider trading among members of Congress could get a major boost next week. NewsNation learned Virginia Democratic Rep. Abigail Spanberger plans to push for a Congressional hearing on the issue — asking to ban members of Congress from owning or trading stock. This, as she is already working on a bipartisan bill to the same effect.
In Feb. 2020, days before the pandemic officially began, now-retired Sen. Jim Inhofe sold off about $750,000 in stocks, then-Sen. Richard Burr sold more than $1.6 million, and Sen. Diane Feinstein unloaded as much as $6.4 million — all within a two-week period.
In fact, just before the lawmakers made these drastic financial decisions, the senators received classified briefings — information the American people didn’t have yet — about the looming pandemic, which crushed markets and the global economy.
Former Sen. Kelly Loefler not only dumped millions in stock during that same two-week period, but she and her husband also bought $250,000 in Citrix stock, a company that makes remote, work-from-home software. However, investigations by the Senate Ethics Committee and the Department of Justice cleared her of insider trading accusations.
Nevertheless, these moves by fellow Congresspeople set warning bells off for two unlikely allies across the aisle: Spanberger and Texas Republican Rep. Chip Roy.
“One day, Chip Roy and I were talking on the house floor,” Spanberger said. “We were expressing our disgust, and we said ‘You know, this ought to not be legal. This ought to be illegal.’”
The two began working together on a bill that would ban members of Congress from buying and selling stock. Their reasoning: Lawmakers consistently get information before anyone else — information that impacts markets. They argue that it’s unfair for them to then use that information for personal profit.
“Ultimately, members of Congress bought stocks in Clorox and in Zoom and in various pharmaceutical companies,” Spanberger said.
On the other side of the Capitol, Sen. Josh Hawley is pushing a similar measure, likening lawmakers trading stock to “legal” insider trading.
“The truth is, is that a lot of the information that members get isn’t technically insider information,” Hawley said. “But yet it’s still really beneficial if you want to make a buck on the stock market.”
But Spanberger and Hawley’s bills, if passed, would go further than restricting just members of Congress from buying and trading stocks. They want to also ban members’ spouses and dependent children from investing as well.
In March 2020, the wife of former Rep. Alan Lowenthal sold all her Boeing shares one day before the House committee he sat on disclosed damaging information on Boeing’s 737 jets.
In 2021, about 20% of Congress — 113 lawmakers — traded stocks worth, in total, $355 million, or an average of $3 million per lawmaker. This does not include trading done by their spouses or family members.
Meanwhile, real consequences for alleged insider trading by Congresspeople are rare.
In Sept. 2022, a court unsealed FBI documents that revealed former Sen. Richard Burr made a series of hasty calls to his wife and brother-in-law, moments before they unloaded hundreds of thousands in stocks before the pandemic was announced. Ultimately, like Loefler, the Department of Justice never prosecuted Burr, Feinstein or Inhofe.
During the last session of Congres, 78 members were alleged to have violated the Stock Act, mostly for failing to disclose their trades in a timely way. None faced criminal charges and usually the fine for this type of offense is just a few hundred dollars.
A rare exception of a lawmaker being penalized for allegations of insider trading was Rep. Chris Collins who was sentenced in Jan. 2020 to 26 months in prison for insider trading and giving his son information. However, he was ultimately pardoned by former President Donald Trump.
NewsNation has reached out to the offices of all the Congresspeople mentioned in this report but has not heard back.