Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act

Subjects: Congress

Summary:  <p><b>Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act</b></p> <p>This bill prohibits Members of Congress (or their spouses) from holding or trading certain investments (e.g., individual stocks and related financial instruments other than diversified investment funds or U.S. Treasury securities).</p> <p>The prohibition does not apply to assets held in a qualified blind trust or to sales by a Member to come into compliance with the bill's requirements. Specifically, the bill allows for sales by current Members during the 180 days following the bill's enactment and for sales by future Members during the 180 days following the commencement of their service.</p> <p>Any profit made in violation of the prohibition must be disgorged to the Treasury and may subject the Member to a civil fine.</p> <p>Each Member must submit an annual certification of compliance, and the Government Accountability Office must audit Members' compliance with the bill's provisions.</p>

<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 439 Introduced in Senate (IS)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                 S. 439

   To amend chapter 131 of title 5, United States Code, to prohibit 
  transactions involving certain financial instruments by Members of 
                               Congress.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 15, 2023

  Mr. Hawley introduced the following bill; which was read twice and 
referred to the Committee on Homeland Security and Governmental Affairs

_______________________________________________________________________

                                 A BILL


 
   To amend chapter 131 of title 5, United States Code, to prohibit 
  transactions involving certain financial instruments by Members of 
                               Congress.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Preventing Elected Leaders from 
Owning Securities and Investments (PELOSI) Act''.

SEC. 2. BANNING INSIDER TRADING IN CONGRESS.

    (a) In General.--Chapter 131 of title 5, United States Code, is 
amended by adding at the end the following:

          ``Subchapter IV--Banning Insider Trading in Congress

``Sec. 13161. Definitions
    ``In this subchapter:
            ``(1) Covered financial instrument.--
                    ``(A) In general.--The term `covered financial 
                instrument' means--
                            ``(i) any investment in--
                                    ``(I) a security (as defined in 
                                section 3(a) of Securities Exchange Act 
                                of 1934 (15 U.S.C. 78c(a)));
                                    ``(II) a security future (as 
                                defined in that section); or
                                    ``(III) a commodity (as defined in 
                                section 1a of the Commodity Exchange 
                                Act (7 U.S.C. 1a)); and
                            ``(ii) any economic interest comparable to 
                        an interest described in clause (i) that is 
                        acquired through synthetic means, such as the 
                        use of a derivative, including an option, 
                        warrant, or other similar means.
                    ``(B) Exclusions.--The term `covered financial 
                instrument' does not include--
                            ``(i) a diversified mutual fund;
                            ``(ii) a diversified exchange-traded fund;
                            ``(iii) a United States Treasury bill, 
                        note, or bond; or
                            ``(iv) compensation from the primary 
                        occupation of a spouse or dependent of a Member 
                        of Congress.
            ``(2) Member of congress.--The term `Member of Congress' 
        has the meaning given the term in section 13101.
            ``(3) Qualified blind trust.--The term `qualified blind 
        trust' has the meaning given the term in section 13104(f).
            ``(4) Supervising ethics committee.--The term `supervising 
        ethics committee' means, as applicable--
                    ``(A) the Select Committee on Ethics of the Senate; 
                and
                    ``(B) the Committee on Ethics of the House of 
                Representatives.
``Sec. 13162. Prohibition on certain transactions and holdings 
              involving covered financial instruments
    ``(a) Prohibition.--Except as provided in subsection (b), a Member 
of Congress, or any spouse of a Member of Congress, may not, during the 
term of service of the Member of Congress, hold, purchase, or sell any 
covered financial instrument.
    ``(b) Exceptions.--The prohibition under subsection (a) shall not 
apply to--
            ``(1) a sale by a Member of Congress, or a spouse of a 
        Member of Congress, that is completed by the date that is--
                    ``(A) for a Member of Congress serving on the date 
                of enactment of the Preventing Elected Leaders from 
                Owning Securities and Investments (PELOSI) Act, 180 
                days after that date of enactment; and
                    ``(B) for any Member of Congress who commences 
                service as a Member of Congress after the date of 
                enactment of the Preventing Elected Leaders from Owning 
                Securities and Investments (PELOSI) Act, 180 days after 
                the first date of the initial term of service; or
            ``(2) a covered financial instrument held in a qualified 
        blind trust operated on behalf of, or for the benefit of, the 
        Member of Congress or spouse of the Member of Congress.
    ``(c) Penalties.--
            ``(1) Disgorgement.--A Member of Congress shall disgorge to 
        the Treasury of the United States any profit from a transaction 
        or holding involving a covered financial instrument that is 
        conducted in violation of this section.
            ``(2) Fines.--A Member of Congress who holds or conducts a 
        transaction involving, or whose spouse holds or conducts a 
        transaction involving, a covered financial instrument in 
        violation of this section may be subject to a civil fine 
        assessed by the supervising ethics committee under section 
        13164.
``Sec. 13163. Certification of compliance
    ``(a) In General.--Not less frequently than annually, each Member 
of Congress shall submit to the applicable supervising ethics committee 
a written certification that the Member of Congress has achieved 
compliance with the requirements of this subchapter.
    ``(b) Publication.--The supervising ethics committees shall publish 
each certification submitted under subsection (a) on a publicly 
available website.
``Sec. 13164. Authority of supervising ethics committees
    ``(a) In General.--The supervising ethics committees may implement 
and enforce the requirements of this subchapter, including by--
            ``(1) issuing--
                    ``(A) for Members of Congress--
                            ``(i) rules governing that implementation; 
                        and
                            ``(ii) 1 or more reasonable extensions to 
                        achieve compliance with this subchapter, if the 
                        supervising ethics committee determines that a 
                        Member of Congress is making a good faith 
                        effort to divest any covered financial 
                        instruments; and
                    ``(B) guidance relating to covered financial 
                instruments;
            ``(2) publishing on the internet certifications submitted 
        by Members of Congress under section 13163(a); and
            ``(3) assessing civil fines against any Member of Congress 
        who is in violation of this subchapter, subject to subsection 
        (b).
    ``(b) Requirements for Civil Fines.--
            ``(1) In general.--Before imposing a fine pursuant to this 
        section, a supervising ethics committee shall provide to the 
        applicable Member of Congress--
                    ``(A) a written notice describing each covered 
                financial instrument transaction for which a fine will 
                be assessed; and
                    ``(B) an opportunity, with respect to each such 
                covered financial instrument transaction--
                            ``(i) for a hearing; and
                            ``(ii) to achieve compliance with the 
                        requirements of this subchapter.
            ``(2) Publication.--Each supervising ethics committee shall 
        publish on a publicly available website a description of--
                    ``(A) each fine assessed by the supervising ethics 
                committee pursuant to this section;
                    ``(B) the reasons why each such fine was assessed; 
                and
                    ``(C) the result of each assessment, including any 
                hearing under paragraph (1)(B)(i) relating to the 
                assessment.
            ``(3) Appeal.--A Member of Congress may appeal the 
        assessment of a fine under this section to a vote on the floor 
        of the Senate or the House of Representatives, as applicable, 
        as a privileged motion.
``Sec. 13165. Audit by Government Accountability Office
    ``Not later than 2 years after the date of enactment of the 
Preventing Elected Leaders from Owning Securities and Investments 
(PELOSI) Act, the Comptroller General of the United States shall--
            ``(1) conduct an audit of the compliance by Members of 
        Congress with the requirements of this subchapter; and
            ``(2) submit to the supervising ethics committees a report 
        describing the results of the audit conducted under paragraph 
        (1).''.
    (b) Conforming Amendments.--
            (1) Section 13103(f) of title 5, United States Code, is 
        amended--
                    (A) in paragraph (9), by striking ``as defined in 
                section 13101 of this title'';
                    (B) in paragraph (10), by striking ``as defined in 
                section 13101 of this title'';
                    (C) in paragraph (11), by striking ``as defined in 
                section 13101 of this title''; and
                    (D) in paragraph (12), by striking ``as defined in 
                section 13101 of this title''.
            (2) Section 3(4)(D) of the Lobbying Disclosure Act of 1995 
        (2 U.S.C. 1602(4)(D)) is amended by striking ``legislative 
        branch employee serving in a position described under section 
        13101(13) of title 5, United States Code'' and inserting 
        ``officer or employee of Congress (as defined in section 13101 
        of title 5, United States Code)''.
            (3) The table of sections for chapter 131 of title 5, 
        United States Code, is amended by adding at the end the 
        following:

          ``subchapter iv--banning insider trading in congress

``13161. Definitions.
``13162. Prohibition on certain transactions and holdings involving 
                            covered financial instruments.
``13163. Certification of compliance.
``13164. Authority of supervising ethics committees.
``13165. Audit by Government Accountability Office.''.
                                 &lt;all&gt;
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