Prohibit Insider Trading Act

Bill: 118-hr-1138
Sponsor: full_name: Rep. Nunn, Zachary [R-IA-3]
Introduced: 2023-02-21
Policy area: Congress
Latest action: action_date: 2023-02-21
text: Referred to the Committee on House Administration, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Summaries:
action_date: 2023-02-21
action_desc: Introduced in House
text: <p><b>Prohibiting Insider Trading 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, investments in the federal retirement savings plan, or U.S. Treasury securities).</p> <p>Generally, the prohibition applies seven days after the first day of a Member's initial term, though for current Members, it applies on the first day of the second session of the 118th Congress. Additionally, the prohibition does not apply to assets held in a qualified blind trust.</p> <p>Any profit stemming from a prohibited holding or transaction must be disgorged to the Treasury and may subject the Member to a civil fine. Additionally, a loss stemming from a prohibited holding or transaction may not be used as an income tax deduction.</p> <p>Each Member must submit an annual certification of compliance to the supervising ethics office. The office must publish each certification on a public website and periodically audit Members' compliance with the bill's provisions.</p>

tv_txt: I 118th CONGRESS 1st Session H. R. 1138 IN THE HOUSE OF REPRESENTATIVES February 21, 2023 Mr. Nunn of Iowa (for himself and Mr. Stanton ) introduced the following bill; which was referred to the Committee on House Administration , and in addition to the Committee on Ways and Means , for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend title 5, United States Code, to prohibit transactions involving certain financial instruments by Members of Congress and their spouses, and for other purposes.

1. Short title This Act may be cited as the Prohibit Insider Trading Act . 2. Prohibiting transactions and ownership of certain financial instruments by Members of Congress and their spouses (a) In general Chapter 131 of title 5, United States Code, is amended by adding after subchapter III the following: IV Restrictions Regarding Financial Instruments 13151. Definitions In this subchapter— (1) the term covered financial instrument — (A) 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 subclause (I) that is acquired through synthetic means, such as the use of a derivative, including an option, warrant, or other similar means; and (B) does not include— (i) a diversified mutual fund; (ii) a diversified exchange-traded fund; (iii) any investment in the Thrift Savings Plan; or (iv) a United States Treasury bill, note, or bond; (2) the term Member of Congress has the meaning given that term in section 13101; (3) the term supervising ethics office has the meaning given that term in section 13101; and (4) the term qualified blind trust has the meaning given that term in section 13104(f)(3). 13152. Prohibition on certain transactions and holdings involving covered financial instruments (a) Prohibition Except as provided in subsection (b), a Member of Congress and the Member’s spouse may not, during the term of service of the Member, hold, purchase, or sell any covered financial instrument. (b) Exceptions The prohibition under subsection (a)— (1) shall begin to apply with respect to a Member of Congress who commences service as a Member after the date of enactment of this subchapter on the date that is seven days after the first date of the initial term of service; and (2) does not apply to a covered financial instrument held in a qualified blind trust operated on behalf of, or for the benefit of, a Member of Congress or the Member’s spouse. (c) Penalties (1) Disgorgement A Member of Congress and the Member’s spouse shall disgorge to the general fund of the Treasury any profit from a transaction or holding involving a covered financial instrument that is conducted in violation of this section. (2) Income tax A loss from a transaction or holding involving a covered financial instrument that is conducted in violation of this section may not be deducted from the amount of income tax owed by the applicable Member of Congress or the Member’s spouse. (3) Fines A Member of Congress who holds or conducts a transaction involving a covered financial instrument in violation of this section may be subject to a civil fine as described under section 13106(a). 13153. Supervising ethics office certification of compliance and audit (a) Certification (1) In general Not later than seven days after the beginning of any session of Congress, each Member of Congress shall submit to the supervising ethics office a written certification that the Member and the Member’s spouse has achieved compliance with the requirements of this subchapter. (2) Publication The supervising ethics office shall publish each certification submitted under paragraph (1) on a publicly available website. (b) Audit Not less than every two years, the supervising ethics office shall conduct an audit of the compliance by Members of Congress with the requirements of this subchapter. . (b) Clerical amendment The table of sections for such chapter 131 is amended by inserting after the item relating to section 13146 the following: SUBCHAPTER IV—RESTRICTIONS REGARDING FINANCIAL INSTRUMENTS 13151. Definitions. 13152. Prohibition on certain transactions and holdings involving covered financial instruments. 13153. Supervising ethics office certification of compliance and audit. . (c) Application The amendments made by subsection (a) shall begin to apply to Members of Congress and their spouses on the first day of the second session of the One Hundred Eighteenth Congress.