The global debate around the trading activity of US politicians and lawmakers has continued to grow. The latest development in this ongoing saga is the introduction of a bill proposing a ban on stock trading for Capitol Hill.
Members of Congress, employees of the executive branch, justices of the Supreme Court, and their spouses and dependent children would be prohibited from trading stocks or directly holding investments in securities, commodities, futures, cryptocurrencies, and other similar investments.
The bill would also prevent those affected from shorting stocks. Politicians would instead be able to make investments in approved blind trusts.
Wall Street Journal explores the response from the House
On September 29, 2022, The Wall Street Journal published an article by Congress Reporter Natalie Andrews on this subject: “House Democrats Signal No Vote Now on Bill Banning Stock Trading for Congress”.
In the article, Andrews provides a background on the bill’s introduction, as well as the resistance shown by members of the House to the proposed regulations.
This pushback is due to the sanctions this would incur for politicians and the complete overhaul required for how Congress members manage their personal finances.
Insight from Capitol Trade’s Head of Research, Ahmed Asaad, is featured in Andrews’ article on banning the trading of stocks:
“We typically see changes in legislation aiming for more transparency, quicker access to information and higher penalties for breaches; the blind trust proposal presents the exact opposite,” said Ahmed Asaad, Head of Research at Capitol Trades.
Yahoo News and MarketWatch investigate the impact of a Ban
Yahoo News published an article explaining the proposed bill that would ban US politicians from stock trading on September 16, 2022: “The congressional stock trading ban, explained”.
In the article, writer Theara Coleman refers to the recently published analysis conducted by The New York Times and 2iQ Research on the trading activity of members of Congress.
Using Capitol Trades’ data, The New York Times found that 97 of those members had made transactions influenced by committees they served on.
This report was used by Yahoo News to illustrate why people are calling for a ban on Congress trading stocks, due to the potential advantage for politicians from their access to industry knowledge.
On September 16, 2022, MarketWatch published “New ETFs with tickers NANC, KRUZ aim to track lawmakers’ stock buys, as ban on congressional trading looks unlikely before midterm elections”.
Reporter Victor Reklaitis explores the potential introduction of two new exchange-traded funds (ETFs) that would track trading by politicians. These ETFs would be shut down if the congressional trading ban proceeds, but they do present an interesting opportunity for investors in the meantime.
One of the ETFs would use the ticker KRU and would track the trades of Republicans and their spouses. The ticker takes its name from Senator Ted Cruz, who has often spoken out for more regulation on congressional stock trading. Capitol Trades’ data was used to identify the sparse trading activity of Cruz in the past three years.
Want more stories featuring Capitol Trades?
2iQ Research and Capitol Trades provide industry leading data that is used to underpin media reporting across the globe. If you’re interested in reading more political trading stories then these latest articles might be valuable.
In October 2022, Benzinga published “2 Dividend Stocks A Prolific Trader, Lawmaker Not Named Nancy Pelosi Just Bought”. This article utilized our free Capitol Trades’ platform to analyze the recent trade activity of Congresswoman Diana Harshbarger.
Congressman Ro Khanna was the focus of another Benzinga article in October 2022, examining the questionable trading tactics of the politician by analyzing Capitol Trades data – “This Savvy Congressman Is Making Trades Under His Kid's Name: Check Out 2 Dividend Stocks He Owns”.
Regional press from The Tennessean covered 2iQ’s report with The New York Times, examining the trading activity of Congress members representing Tennessee. The full article can be read here: “Report identifies six members of Congress from Tennessee for potential conflicts with stock trades”.
Elsewhere, San Antonio Express News also analyzed politicians highlighted by The New York Times who represent the state of Texas in Congress: “These Texas lawmakers bought or sold stock tied to their committee work, NYT reports”.
Follow 2iQ’s blog for more updates regarding reporting on politician trading activity.