Sen. Elizabeth Warren, a Massachusetts Democrat, said in an interview with Business Insider on Wednesday that she plans to introduce legislation banning individual stocks trades or ownership by members of Congress.

Her announcement comes after multiple members of Congress were accused of trading stocks directly affected by their own insider knowledge and voting decisions during the Covid-19 pandemic.

“You shouldn’t have to wonder whether your members of Congress are looking out for you or lining their own pockets,” Warren tweeted Wednesday. “My plan to #EndCorruptionNow will ban senators and representatives from owing or trading individual stocks while in office.”

When Financial Advisor contacted advisors about the possible prohibition, most (but not all) spoke in support of it. “Just as there are laws to prevent corporate executives from trading on non-public information, elected officials receiving classified briefings should not be able to trade on that information either,” said David N. Bize, an investment advisor with First Allied in Oklahoma City. “Oklahoma Senator Jim Inhofe selling stocks after receiving non-public information about the Covid-19 pandemic is a good example.”

The U.S. Justice Department has cleared Inhofe of wrongdoing in the sale of stock in five companies three days after a congressional briefing on Covid. Inhofe was among four senators whose stock trades were questioned after they followed a January 24 briefing to senators about the pandemic’s imminent spread to the United States. Inhofe said he wasn’t at the meeting.

Financial records show that Inhofe sold at least $180,000 worth of stocks on January 27, three days after the briefing.

“Yes, absolutely, lawmakers should be prohibited from trading. What they are doing, and did do so as recently as a year ago, is the worst kind of insider trading,” said George R. Gagliardi, founder of Coromandel Wealth Management in Lexington, Mass.

This is not Sen. Warren’s first attempt to prevent lawmakers from trading stocks. In 2018 and 2020, she introduced the “Anti-Corruption and Public Integrity Act,” which was also designed to curb lobbying and corruption. That legislation would have also brought more ethical scrutiny to lawmaking by creating an ethics agency to oversee federal employees.

The Senate was led by the GOP in those years, and the bill failed both times. It had zero co-sponsors in the Senate and only six co-sponsors in the House of Representatives.

Democrats control both chambers of Congress now, and Warren sits on the Senate Finance Committee. However, both Democrat and Republican lawmakers tend to bristle at the thought of stock trading bans.

Warren has not yet provided details about the timing of new legislation, whether she would write a new bill or reintroduce a modified version of the Anti-Corruption and Public Integrity Act.

There is already a law on the books that prohibits members of Congress and their staffs from using nonpublic information derived from their official positions for personal benefit. That law, known as the Stop Trading on Congressional Knowledge (STOCK) Act was passed in 2012.

But numerous members of Congress since then have been investigated for stock trading where it was alleged they used their knowledge of upcoming legislative matters to their personal advantage.

Sen. Richard Burr, a Republican, was accused of selling $1.7 million in pandemic-related stocks after a congressional briefing and just before concerns about Covid-19 caused the March, 2020 stock market crash. Rep. Tom Malinowski, a Democrat, is currently under investigation for investing in companies that make ventilators, vaccines and personal protective equipment. 

Thomas Balcom, founder of 1650 Wealth Management in Lauderdale-by-the-Sea, Fla., agreed with the idea that members of Congress should be prohibited from buying and selling stocks. “I would not prohibit them from buying or selling ETFs, mutual funds or other index-based investments, but their access to inside information should preclude them from trading individual stocks.” He doubted that Warren’s legislation would pass.

But Elliot B. Herman, the chief investment officer at PRW Wealth Management, Quincy, Mass., disagrees with a trading ban on stocks for members of Congress.

“Rules against insider trading have been in force for many years and should serve as a deterrent,” Herman said. “In addition, politicians face the threat of public backlash, as we have seen. Taking away the fundamental right to invest in individual stocks whose purpose may be perfectly legitimate is overkill and should not be pursued further beyond some potential tweaks to the existing laws.”