The Chamber prohibits elected officials from buying shares, but authorizes them to sell

The American House of Representatives has taken a new step in supervising investments made by elected officials. The representatives adopted a text which now prohibits the purchase of listed shares by members of Congress, their spouses and their dependent children, while allowing them the possibility of keeping and then selling the securities already held. This decision opens a new debate on the prevention of conflicts of interest before the examination of the bill by the Senate.

House passes insider trading reform

The U.S. House of Representatives passed the bill by a vote of 232 to 198 before sending it to the Senate. This textintroduced by Wisconsin Representative Bryan Steil, aims to prevent members of Congress from profiting from inside information when making investments. The stated objective is to strengthen confidence in institutions while limiting the risks of insider trading.

Bryan Steil, elected from Wisconsin, asserts that this reform provides for significant financial sanctions in the event of an infraction. Violators would face a fine of $2,000 or 10% of the amount of the transaction concerned.

A fine of $2,000 or 10% of the transaction amount, as well as restitution of profits, will be provided. Violators will lose any gains made if they fail to comply with this legislation.

Bryan Steil, elected from Wisconsin.

In addition, they should return all the profits made thanks to an operation deemed contrary to the law. This system seeks to discourage any purchase of shares made on the basis of non-public information according to its declarations.

However, the text only concerns some public officials. The proposal targets only members of Congress, their spouses and dependent children. The president, the vice-president and their families are not included in this legislative framework, unlike other projects currently being studied in Washington.

Stock sales remain authorized despite criticism

If the Chamber now prohibits new purchases, it still authorizes elected officials to keep and then sell the shares they already own. This provision constitutes the main point of disagreement around the bill. Several political leaders believe that this exception strongly limits the scope of the reform.

Bryan Steil nevertheless defends this approach by explaining that it introduces an additional transparency mechanism. Members of Congress must give seven days’ notice of any sale of securities already held. According to him, this obligation reduces the possibilities of taking advantage of confidential information before a transaction.

Senator Elizabeth Warren, however, disputes this analysis. The senator believes that parliamentarians will continue to be able to own and transfer shares, which does not fully address the risks of conflicts of interest. She wrote in a post on Bluesky:

I’ve long fought to ban members of Congress from trading stocks, but the bill passed by House Republicans has significant flaws. Parliamentarians can continue to own and sell shares; this text will therefore not solve the problem. It will not pass the Senate. Members of Congress should not own, buy or sell stocks.

Elizabeth Warren, Democratic senator.

She considers that elected officials should neither buy, own, nor sell financial securities. For this reason, she judges that the text should not be adopted by the Senate in its current form.

A separate reform of projects linked to cryptocurrencies and predictive markets

After its adoption by the House of Representativesthe text is now following its legislative journey before the American Senate. This proposal, however, remains different from the Digital Asset Market CLARITY Act, also examined by senators. While the latter concerns the structure of the cryptocurrency market, the project led by Bryan Steil focuses solely on investments made by elected officials.

The draft CLARITY Act, which currently finds itself between investor protection and conflicts of interest, notably provides for restrictions on the issuance or sponsorship of digital tokens by American public officials until 2029. Conversely, the text adopted by the House does not deal with digital assets. It exclusively supervises operations relating to shares held by members of Congress and their family circle.

At the same time, Bryan Steil supports another proposal dedicated to prediction markets. This text targets politicians using platforms like Kalshi or Polymarket to bet on public decisions or political events such as the incident involving the soldier who allegedly won more than $400,000 betting on the arrest of Venezuelan President Nicolás Maduro. The proposed sanctions follow the same principle as that used for actions, with a fine of $2,000 or 10% of the value of the prohibited operations.

Interest in prediction markets has grown after several high-profile cases involving large gains on political events. These episodes fueled discussions around better supervision of investments and bets involving public officials. From now on, the Senate will have to decide whether the text adopted by the House maintains its current balance or whether it must be modified before possible final adoption.