Ban Conflicted Trading Act

To prohibit Members of Congress from purchasing or selling certain investments, and for other purposes. 1. Short title This Act may be cited as the Ban Conflicted Trading Act 2. Definitions In this Act— (1) the term commodity 7 U.S.C. 1a (2) the term covered investment (A) means investment in a security, a commodity, or a future, or any comparable economic interest acquired through synthetic means such as the use of a derivative; and (B) does not include— (i) a widely held investment fund described in section 102(f)(8) (ii) a United States Treasury bill, note, or bond; (3) the term covered person (A) a sitting Member of Congress; and (B) an individual employed as an officer or employee of Congress required to file a report under the Ethics in Government Act of 1978 (5 U.S.C. App.); (4) the term future (5) the term security 15 U.S.C. 78c(a) 3. Prohibitions (a) Transactions Except as provided in sections 4 and 5, no covered person may— (1) purchase or sell any covered investment; or (2) enter into a transaction that creates a net short position in any security. (b) Positions A covered person may not serve as an officer or member of any board of any for-profit association, corporation, or other entity. 4. Exceptions (a) Investments held before taking office (1) In general A covered person may have control over or knowledge of the management of any covered investment held by the covered person as of the day before the date on which the covered person took office. (2) Prohibition on purchasing or selling A covered person may not buy or sell any investment described in paragraph (1) except in the case of— (A) placing the investment in a qualified blind trust described in section 5; or (B) divesting themselves of any investment under subsection (b). (b) Divestiture A covered person may sell a covered investment during the 6-month period beginning on— (1) the date on which the covered person takes office or begins employment, as applicable; or (2) the date of enactment of this Act. 5. Trusts (a) In general On a case-by-case basis, the Select Committee on Ethics may authorize a covered person to place their securities holdings in a qualified blind trust approved by the committee under section 102(f) (b) Blind trust A blind trust permitted under this subsection shall meet the criteria in section 102(f)(4)(B) 6. Administration and enforcement (a) Administration (1) In general The provisions of this Act shall be administered by the Select Committee on Ethics of the Senate and the Committee on Ethics of the House of Representatives. (2) Guidance The Select Committee on Ethics of the Senate and the Committee on Ethics of the House of Representatives are authorized to issue guidance on any matter contained in this Act, including— (A) whether a covered person may hold an employee stock option, or similar instrument, that had not vested before the date on which the covered person was elected; and (B) the process and timeline for when a covered person shall no longer serve as an officer or member of any board of any for-profit association, corporation, or other entity. (b) Enforcement Whoever knowingly fails to comply with this Act shall be subject to a civil penalty of not less than 10 percent of the value of the covered investment that was purchased or sold or the security in which a net short position was created in violation of this Act, as applicable.

Summary: Ban Conflicted Trading Act This bill prohibits a Member of Congress or certain congressional officers or employees from (1) purchasing or selling specified investments, (2) entering into a transaction that creates a net short position in a security, and (3) serving as an officer or member of any board of any for-profit entity.