Congressional stock trading, the STOCK Act and reform

Patricia Foster//January 27, 2026//

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Have you ever wondered how members of Congress, many of whom enter office with relatively modest financial resources, accumulate so much wealth during their years of public service? Currently, members of both the House and the Senate generally earn salaries of $174,000, exclusive of benefits. Salaries are higher for members of Congress in leadership roles. Concerns about members of Congress exploiting their roles for financial gain in the capital markets have been simmering for decades. Bi-partisan efforts to evaluate the adequacy of existing laws are underway. In this column we discuss the STOCK Act of 2012 and more recent efforts to improve the regulatory framework.

The STOCK Act

The Center for Responsive Politics, a watchdog group based in Washington, DC, released a report several years ago which concluded that members of Congress experienced an average increase in net worth of 84% during the period from 2004-2006. We are unaware of any studies that have attributed “above-average” wealth accumulation by members of Congress to “above-average” investment acumen. Following the publication of the report, concerns increased that the laws then in effect contained an effective “insider trading loophole” for members of Congress. In 2006, U.S. Representatives Brian Baird (D-WA) and the late Louise Slaughter (D-NY) introduced legislation “to prohibit Members and employees of Congress from profiting from information that they [obtained] in their official positions.” The original version of the legislation had a few additional sponsors, but it failed to gain traction. Similar bills were introduced in 2007, 2009, and 2011, to no avail.

While securities law experts pondered varying views as to whether traditional theories of insider trading liability applied to securities transactions by members of Congress, investigative journalist Peter Schweizer was busy analyzing trading data. The results of his research were published in his 2011 book titled Throw Them All Out: How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals and Cronyism That Would Send the Rest of Us to Prison. Schweizer’s book is a stark reminder that lawmakers have access to information that few other people have, including information having the potential to affect the economy and the financial markets dramatically. Schweizer’s book provides a detailed overview of securities trading activity by members of Congress at times when important legislation was being considered. His book also reminds us that lawmakers can write legislation that has the potential to destroy corporations or help them prosper.

Although Schweizer’s well researched book presented a compelling case for comprehensive ethics reform and new rules for the political class, it was not until Steve Kroft’s interview of Schweizer on CBS’ 60 Minutes in November of 2011 that members of Congress acknowledged the need for reform. The power of broadcast journalism had increased public awareness of the questionable trading practices by members of Congress. Following that broadcast, sponsorship for the legislation originally proposed by U.S. Representatives Baird and Slaughter increased exponentially, and similar bills were introduced in the Senate. The final version of the STOCK Act was signed into law by President Obama on April 4, 2012.

The STOCK Act confirmed that members of Congress and congressional employees, as well as all other officers and employees in the executive and judicial branches of government, are not exempt from the insider trading prohibitions under the federal securities laws. It also enhanced government transparency by amending the Ethics in Government Act to require members of Congress, certain legislative staffers and thousands of executive branch officials to file periodic reports of most purchases and sales of securities over $1,000. The original legislation required that the transaction reports be maintained on official House and Senate websites for the legislative branch and on the Office of Government Ethics website for the executive branch, “to allow the public to search, sort and download data contained in the reports.”

Continuing concerns

Although the STOCK Act has provided greater transparency with respect to securities trading activities of both elected and unelected government employees, that transparency was diminished in 2013 when Congress amended the Act in response to concerns about personal privacy and national security. Even though financial disclosure forms and periodic transaction reports for members of Congress are available for public inspection on government websites, it has become clear that the level of transparency provided by the STOCK Act alone cannot deter government employees from engaging in profitable securities transactions using information obtained in the course of their positions.

Congressional committees can be a significant source of information for their members. Think about it. If you had known, in early 2020, that you might be working from home during a multi-year, global pandemic, would you have bought Zoom Video Communications, Inc. (Zoom)? Zoom had not yet become a household word when, during the first quarter of 2020, certain members of Congress were briefed on the coronavirus and the possible impact that it could have on the economy and the capital markets. Following the briefing, it was reported that several senators had sold portfolio holdings that might be affected adversely by the pandemic. Reports also surfaced that one senator purchased shares in a company that offered teleconferencing software, which could be useful to people working remotely from home.

Recent initiatives

In response to ongoing concerns about transaction disclosure failures and allegations of insider trading by members of Congress, Rep. Bryan Steil (R-WI), Chairman of the Committee on House Administration held a hearing on November 19, 2025, titled “Taking Stock of the STOCK Act” to address perceived deficiencies in the current law. He was joined by Ranking Member, Joseph Morelle (D-NY) and other members of the Committee.

The Committee discussed one proposal that reflects a persistent theme over the years: the imposition of an outright ban on the purchase of individual securities by members of Congress. A bill recently introduced by Chairman Steil would do just that. Those who have opposed such a ban have argued that it would discourage individuals from serving in Congress because it would deprive them of opportunities to accumulate wealth that are available to others. Another way of looking at an outright ban on the purchase of individual securities would be to view it as an “opportunity cost” incurred in connection with one’s service to the public. An outright ban might encourage members of Congress to limit the number of terms served.

On January 12, 2026, Congressman Bryan Steil, Chairman of the Committee on House Administration, introduced the Stop Insider Trading Act. This proposed legislation would prohibit Members of Congress, spouses, and dependent children from purchasing publicly traded stocks other than securities issued by certain registered investment companies. It would also require public notice seven days before a lawmaker, spouse, or dependent child could sell a stock. We will provide additional information about this important legislation for our readers as it progresses through Congress.

This column is a collaborative effort between Patricia Foster and Jesse Cramer. Patricia is a corporate/securities law attorney and a Certified Securities Compliance Professional. Her experience includes representation of clients in various sectors of the financial services industry, including broker-dealers, investment advisers and investment companies. Jesse is is a Financial Advisor at CAPTRUST. The information in this column is provided for educational purposes and does not constitute legal or investment advice.