A January 2025 report by Unusual Whales, a financial data platform for retail traders, revealed how members of Congress once again beat average market returns last year. Not surprisingly, debate has resurfaced in Washington about whether it is time to pass legislation, such as that proposed by Sen. Jon Ossoff (D-Ga.), to ban stock trading by elected representatives.
Ossoff has championed this issue in one form or another since first being elected to the Senate in 2020, and its current, bipartisan permutation, the Ending Trading and Holdings In Congressional Stocks (ETHICS) Act, reflects a principle with which I and a large majority of the American electorate agree. However, as former presidential candidate Ross Perot famously opined, “the devil is in the details.”
By any reasoned standard, government officials profiting from the regulations and laws they help enact constitutes a serious ethical issue. The magnitude of this problem was revealed starkly last September, when it was reported that former Speaker Nancy Pelosi’s (D-Calif.) husband sold 2,000 shares of Visa stock for $500,000 just weeks before the Justice Department sued the company’s debit card business in a lawsuit many legal experts consider unjustified. The actions by Mr. Pelosi ignited increased public concern that officials may be using their positions, and the inside information they obtain as a result, to influence the market for their own benefit.
It is not just Pelosi’s husband who appears to be a beneficiary of such maneuvering. The new Unusual Whales report shows that in 2024 one member of Congress gained an eye-popping 149 percent in stock trades — more than 124 percent greater than the S&P 500’s 2024 benchmark. While this report highlights the significance of this potential conflict of interest problem, an outright ban on members trading stocks is not the appropriate remedy.
In 2012, Congress passed the STOCK Act, which bars lawmakers from trading on insider information. The Pelosi scandal, however, shows why that law needs strengthening. For example, the ban must apply to representatives’ immediate family members as a way to close loopholes like the one by which Pelosi’s husband profited so handsomely.
An outright stock trading ban for all members paints with too broad a brush and would be grossly unfair. Contrary to popular belief, not all members of Congress are extraordinarily wealthy. Members earn $174,000 annually, with those in leadership positions receiving slightly more. That is, of course, a comfortable salary, but it does not represent “I don’t need to invest” wealth, especially considering the high cost of living in the Washington, D.C. environs.
Broadly speaking, the stock market remains one of the best tools with which all Americans can build their financial futures, and public servants should not be excluded from participating in it. That said, reform is necessary to address the unresolved conflicts of interest that come with congressional stock trading.
Instead of outright banning members’ stock trading, federal lawmakers should focus on improving the enforcement of the STOCK Act by strengthening its penalties — as low as $200 for a first-term violation. Such de minimus penalties may be why Business Insider’s investigation of financial disclosures found that 57 members of Congress and at least 182 top Capitol Hill staffers were late in filing their stock trades as demanded by the STOCK Act in 2020 and 2021 alone.
Increasing the STOCK Act’s penalties would go a long way toward improving members’ compliance and rooting out corruption and insider trading.
Federal decisionmakers’ proposals and lawsuits should also be subject to greater scrutiny from key congressional committees of jurisdiction — oversight that surely would help limit, if not stop actions that are either illegal or unjustly motivated by personal or political gain.
For example, if the House Judiciary Committee, on which I served during my eight years in Congress, had held the Justice Department’s feet to the fire over its seemingly baseless Visa debit card lawsuit, and demanded that it explain the reasoning behind its actions (or inactions), then the lawsuit may not have ever been filed, and the appearance or reality of Congress profiteering from such overreach would have been avoided.
Finally, incoming Attorney General Pam Bondi can (and should) establish an independent ethics panel and task it with regularly examining the financial activities of federal officials and their families.
Through stronger enforcement of existing law, Congress can better address the root of the congressional stock trading problem without unduly constraining the financial freedom of its members.
Bob Barr currently serves as president of the National Rifle Association. He represented Georgia’s 7th District in the U.S. House of Representatives from 1995 to 2003. He served as the United States Attorney in Atlanta from 1986 to 1990 and in the CIA in the 1970s. He now practices law in Atlanta and serves as head of Liberty Guard.
