U.S. Senator Josh Hawley (R-Mo.) has introduced the Eliminating Executive Branch Insider Trading Act, which would ban the trading and holding of individual stocks by senior Executive Branch officials, many of whom have decision-making power that impacts the work being done in their respective agencies.
The Wall Street Journal recently reported that nearly one-third of the Energy Department’s senior officials or their families owned stocks related to the agency’s work, despite being warned they could be in violation of federal conflict-of-interest rules.
"Senior members of the Executive Branch – who have access to privileged information – shouldn’t be using it to get rich," said Senator Hawley. "The American people have entrusted these civil servants with implementing and enforcing laws. To ensure they abide by these standards, senior Executive Branch officials and their spouses must be banned from trading stocks."
The Eliminating Executive Branch Insider Trading Act would:
- Prohibit senior executive branch officials and their spouses from holding, acquiring, selling, or shorting individual stocks during their tenure in office. The ban would cover the President, Vice President, and high-level civilian and military officials. The prohibition would not apply to holdings in diversified mutual funds, diversified exchange-traded funds, or U.S. Treasury bills and bonds.
- Require covered officials and their spouses to divest prohibited holdings or place the assets in a blind trust within six months of assuming office. Non-compliance will result in disgorgement of any profits and stiff penalties.
- Within two years of enactment and annually thereafter, require the Government Accountability Office (GAO) to conduct an audit for compliance with the ban and report on its findings to the House and Senate Ethics Committees.
View the full bill text here.