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.”