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This survey is on the question of whether Members of Congress and other federal government officials should be able to hold or trade stocks in individual companies.
Currently, Members of Congress can do so. There has been concern this could create a conflict of interest. Members of Congress get information that the public does not get, that can have an impact on the value of stocks or assets they may trade. Members of Congress and other federal officials also make decisions that affect the business prospects of companies they may hold stock or assets in.
In 2012, a law was passed to address this concern. It requires Members of Congress to disclose all of their stock trades so that the public, ethics boards in Congress, and federal agencies can see if there is any conflict of interest and investigate any possible “insider trading.” Insider trading is when someone buys or sells stock based on information that is not available to the public and is a felony that comes with prison time.
There is currently a debate over whether it is enough to require just the disclosure of stock trading for Members of Congress, or if there should be greater restrictions.
A proposal has been put forward in Congress that would actually ban Members of Congress (and family members that live with them) from trading stocks in individual companies.
For any such stocks that they already own, they would have to either:
- Sell them -OR-
- Put them in a “blind trust,” which an independent person manages and decides which stocks to buy or sell.
However, Members of Congress would still be able to buy or sell shares of mutual funds or index funds that include stocks in numerous companies.