US House passes congressional stock trading ban despite loophole concerns

The US House of Representatives has passed a congressional stock-trading ban by a 232-198 vote, sending the measure to the Senate despite criticism that it leaves existing holdings untouched.

• The House passed the Stop Insider Trading Act in a 232-198 vote.
• Elizabeth Warren criticized loopholes allowing lawmakers to retain and sell existing stocks.
• Bryan Steil has proposed similar restrictions for congressional prediction-market wagers.

According to a statement from Representative Bryan Steil's office, the House approved the Stop Insider Trading Act on Wednesday, July 22. The Wisconsin Republican introduced the legislation in January and urged senators to send it to President Donald Trump for his signature.

Under the bill, members of Congress, their spouses and dependent children would no longer be allowed to buy securities issued by publicly traded companies. The restriction would apply to new purchases, but lawmakers and their relatives could retain stocks already in their portfolios.

Existing shares could still be sold, provided the owner files a public notice before the transaction. The bill requires notice at least seven days and no more than 14 days before a planned sale, with filings submitted to the clerk of the House or the secretary of the Senate.

Steil presented the proposal as a way to prevent lawmakers from using information obtained through public office for personal gain. Speaking after its passage, he called the bill "a major step forward for ethics reform on Capitol Hill."

Penalties would combine a financial charge with the loss of trading profits. Congressional ethics committees would impose either $2,000 or 10% of the covered investment's value, whichever amount is higher, while violators would also have to surrender any profit earned from a prohibited transaction.

During the House debate, Steil noted that lawmakers had not previously received a comparable opportunity to vote on the issue. The bill secured bipartisan support, though the 232 votes in favor represented only a narrow share of the chamber.

After receiving the legislation on Thursday, the Senate became the next obstacle for Steil's proposal. Senator Elizabeth Warren, a Massachusetts Democrat who has backed stricter limits on congressional trading, rejected the House language because it would permit officials to keep and sell stocks they already own.

"The bill has major loopholes," Warren wrote on Thursday, adding that the current version was "not gonna fly in the Senate." She argued that members of Congress should be barred from owning, buying or selling individual stocks rather than facing restrictions limited mainly to future purchases.

Steil has defended the advance-notice requirement as a deterrent against trades based on confidential information. Because a planned sale would become public before execution, lawmakers could face scrutiny over the transaction and any government action connected to the company.

Warren's objection, however, points to a basic difference between the two approaches. Her preferred restriction would force lawmakers out of individual stock ownership, while the House bill would let current portfolios remain in place and regulate how their holdings are sold.

The proposal also covers fewer federal officials than the ethics language being considered as part of the Digital Asset Market Clarity Act. Steil's stock bill applies to Congress and the immediate family members specified in the text, leaving the president, vice president and their families outside its restrictions.

Alongside the stock legislation, Steil has proposed a separate measure covering wagers made through prediction platforms such as Kalshi and Polymarket. The House Administration Committee chairman introduced the Stop Lawmakers from Predicting Act on June 18, citing the risk that officials could profit from information unavailable to the public.

According to the House Administration Committee, the legislation would prevent members of Congress, their spouses and dependent children from wagering on political outcomes or public-policy questions. Steil argued that lawmakers should write policy rather than place bets on its outcome.

Its penalty structure closely follows the House-approved stock bill. A violation would carry a charge equal to $2,000 or 10% of the prohibited wager's value, whichever is higher, plus forfeiture of the net gain from the contract.

Public scrutiny of prediction markets has increased following reports of users profiting from political information. One reported case involved a soldier who allegedly earned more than $400,000 from contracts linked to Venezuelan President Nicolás Maduro's removal by US forces in January.

A former Trump teleprompter operator was separately reported to have made more than $90,000 from Kalshi contracts tied to words and phrases used during the president's speeches. Arizona officials later cited the reported activity while tightening rules against government employees using nonpublic information on prediction platforms.

Steil's two proposals apply the same principle to different financial products: congressional officials should not be able to turn privileged knowledge into personal returns. Their progress now differs, however, as the stock bill awaits Senate action while the prediction-market measure remains at an earlier stage of the legislative process.

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