Stop Insider Trading Act

The bill adds a new subchapter to federal ethics law that covers how Members of Congress and their close family can invest in the stock market. It defines “covered individuals” as Members of Congress, their spouses, and their dependent children. It defines “covered investments” mainly as securities of publicly traded companies and related financial products, like options and swaps, but excludes certain diversified funds, some location-focused funds, small business interests, and certain qualified trusts. During federal service, covered individuals would not be allowed to buy covered investments, except in limited cases. They could still hold and reinvest in some investments they already own, including through dividend reinvestment and certain job‑related transactions by spouses or children. Publicly traded companies and securities terms are tied to existing securities law. The bill requires advance public notice before any covered individual sells a covered investment. The Member of Congress must file a notice 7 to 14 days before the sale, stating the planned date, description, and number of shares. The notice must be filed with the House Clerk or Secretary of the Senate and posted online, and can be withdrawn if the sale does not happen. If a covered individual breaks these rules, the supervising ethics office must require payment of a fee and, for unlawful purchases, a forced sale of the investment. The fee is at least $2,000 or 10% of the transaction value, whichever is higher, plus any net gain made while the person was a covered individual. The bill bans using official office funds or campaign and political donations to pay these fees, sends collected fees to the U.S. Treasury, allows ethics offices to refer unpaid cases to the Attorney General, and lets ethics offices issue guidance on how to apply the rules. The new rules would start 180 days after the bill becomes law.