House Democrats have introduced a bill that would bar federal lawmakers and their staff from trading stocks or sitting on corporate boards. The move comes after recent reports that four U.S. Senators dumped stock shortly before the coronavirus crashed the market. Sens. Richard Burr (R-NC), James Inhofe (R-OK), Kelly Loeffler (R-GA), and Dianne Feinstein (D-CA) all sold large amounts of stock in the days after a group of senators (including Burr and Loeffler) received a private briefing from the CDC about the impending Covid-19 outbreak.
Sponsors of the new legislation say it will "end potential conflicts of interest created by members of Congress," and "help ensure that Congress is working for the American people and not their own stock portfolios."
The bill likely faces an uphill battle, but "Money Answers Man" Jordan Goodman doesn't think it is necessary anyway. "There already is what's called the STOCK Act, which prevents not only senators and representatives, but their staffs who have access to insider information, from trading on that information," he says. "You can't say people who work for the government can't own stocks, but what you want to prevent is trading on inside information."
Goodman tells KTRH that most lawmakers have learned to live within the bounds of the STOCK Act. "Typically what happens is their stocks go into a blind trust, meaning it is managed by money managers, but (the lawmakers) do not know what trades are being made," he says.
In this case, Goodman believes existing law should be sufficient to investigate and punish the actions in question. "These four senators clearly got an insider hearing from health officials about how bad this was going to be, and then immediately after that sold huge amounts of stock before the stock market fell," he says. "That's a classic case of insider trading which should definitely be prosecuted."