(SNews) – Republican Senator Josh Hawley (R-MO) has introduced a new bill called the “PELOSI Act” which seeks to block members of Congress from abusing their positions by trading stocks for personal profit.
The bill is named after former House Speaker Nancy Pelosi (D-CA) who has earned tens of millions of dollars from suspiciously-timed stock trades.
In one example from last year, the California congresswoman’s husband, Paul Pelosi, bought up to $5 million in stock in a semiconductor company right as the Senate was passing legislation to subsidize the semiconductor industry massively.
When members of the public use the same methods to trade stocks based on inside information they are committing a federal crime known as “insider trading.”
Insider trading carries a maximum prison sentence of up to 20 years in prison.
Hawley’s legislation, known as the Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act, seeks to ban lawmakers and their family members from trading stocks.
The Missouri senator, who introduced similar legislation last year, said the practice must end.
“For too long, politicians in Washington have taken advantage of the economic system they write the rules for, turning profits for themselves at the expense of the American people,” Hawley said in a statement.
“As members of Congress, both Senators and Representatives are tasked with providing oversight of the same companies they invest in, yet they continually buy and sell stocks, outperforming the market time and again,” he continued.
I have just released the full trading report on politicians in 2021.
In short, many beat the market.
They traded more than ever before.
And they made numerous unusually timed trades, resulting in huge gains.
— unusual_whales (@unusual_whales) January 10, 2022
Hawley’s PELOSI Act would ban members of Congress and their spouses from holding, acquiring, or selling stocks while in office.
The legislation gives members and their spouses six months after taking office to divest stocks they hold or put them in a blind trust.
If members of Congress or their spouses are found to be in violation of the legislation’s rules, they would have to forfeit any profits to the United States Treasury.
Violators would also be prohibited from deducting those losses from their income taxes.
The legislation gives the House and Senate ethics committees full power to fine members of Congress for such violations and would be required to publicize them to the American people.
In accordance with the bill, the Government Accountability Office (GAO) would be required to audit Congress members to ensure they comply with the rules.
“While Wall Street and Big Tech work hand-in-hand with elected officials to enrich each other, hardworking Americans pay the price,” Hawley said.
“The solution is clear: we must immediately and permanently ban all members of Congress from trading stocks.”
Banning members of Congress and their family members from trading stocks is hugely popular among likely American voters.
Last year, a Trafalgar Group survey revealed that 76 percent believe Congress has an “unfair advantage” regarding the stock market.
Only five percent support permitting congressional stock trading.