Eliminating Executive Branch Insider Trading Act

To amend chapter 131 1. Short title This Act may be cited as the Eliminating Executive Branch Insider Trading Act 2. Sense of Congress It is the sense of Congress that executive branch officials should not have a personal financial interest in the outcome of Government policy decisions. 3. Banning insider trading in the executive branch (a) In general Chapter 131 IV Banning insider trading in the executive branch 13161. Definitions In this subchapter: (1) Covered financial instrument (A) In general The term covered financial instrument (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 (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 (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 covered individual who is a spouse or dependent of an individual described in subparagraphs (A) through (E) of paragraph (2). (2) Covered individual The term covered individual (A) the President; (B) the Vice President; (C) each officer or employee in the executive branch, including a special Government employee as defined in section 202 of title 18, who occupies a position classified GS–15 or above of the General Schedule or, in the case of positions not under the General Schedule, for which the rate of basic pay is equal to or greater than 120 percent of the minimum rate of basic pay payable for GS–15 of the General Schedule; (D) each member of a uniformed service whose pay grade is at or in excess of O–7 under section 201 of title 37; (E) each officer or employee in any other position determined by the Director of the Office of Government Ethics to be of equal classification to the positions described in subparagraphs (C) and (D); and (F) the spouse of any individual described in subparagraphs (A) through (E). (3) Qualified blind trust The term qualified blind trust (4) Supervising ethics committee The term supervising ethics committee (A) the Select Committee on Ethics of the Senate; and (B) the Committee on Ethics of the House of Representatives. 13162. Prohibition on certain transactions and holdings involving covered financial instruments (a) Prohibition Except as provided in subsection (b), covered individual, or any spouse of a covered individual, may not, during the term of service of the covered individual, hold, purchase, or sell any covered financial instrument. (b) Exceptions The prohibition under subsection (a) shall not apply to— (1) a sale by a covered individual, or a spouse of a covered individual, that is completed by the date that is— (A) for a covered individual serving on the date of enactment of the Eliminating Executive Branch Insider Trading Act (B) for any covered individual who commences service as a covered individual after the date of enactment of Eliminating Executive Branch Insider Trading Act (2) a covered financial instrument held in a qualified blind trust operated on behalf of, or for the benefit of, the covered individual or spouse of the covered individual. (c) Penalties (1) Disgorgement A covered individual 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 covered individual 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 Attorney General under section 13163. 13163. Civil penalties (a) Civil action The Attorney General may bring a civil action in any appropriate United States district court against any covered individual who violates any provision of section 13162. (b) Civil penalty The court in which any action is brought under subsection (a) may assess against a covered individual a civil penalty of not more than $10,000 or the amount of compensation, if any, that the covered individual received for the prohibited conduct, whichever is greater. 13164. Audit by Government Accountability Office Not later than 2 years after the date of enactment of the Eliminating Executive Branch Insider Trading Act (1) conduct an audit of the compliance by a representative sample of covered individuals 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) Clerical amendment The table of sections for chapter 131 SUBCHAPTER IV—Banning insider trading in Congress 13161. Definitions. 13162. Prohibition on certain transactions and holdings involving covered financial instruments. 13163. Civil penalties. 13164. Audit by Government Accountability Office. .

Summary: Eliminating Executive Branch Insider Trading Act This bill prohibits specified executive branch officials and others from holding or trading certain investments (e.g., individual stocks and related financial instruments other than diversified investment funds or U.S. Treasury securities). Covered individuals include the President, the Vice President, each executive branch officer or employee at or above a specified pay grade, each member of a uniformed service at or above a specified pay grade, each officer or employee in any other position determined by the Office of Government Ethics to be of equal classification to such positions, and the spouse of any such individual. The prohibition does not apply to assets held in a qualified blind trust. Any profit made in violation of the prohibition must be disgorged to the Treasury and may subject the individual to a civil fine. The Department of Justice may bring a civil action in U.S. district court against any covered individual who violates this bill's prohibition. The Government Accountability Office, at specified intervals, must (1) audit compliance by a representative sample of covered individuals with this bill's requirements, and (2) report the results to the supervising ethics committees.