House Approves Bill to Curb Insider Trading by Lawmakers

According to Senator Elizabeth Warren, the House bill “won’t solve the problem” of insider trading in Congress because lawmakers would still be permitted to own and trade individual stocks.

The US House of Representatives has passed a bill that would prohibit members of Congress, along with their spouses and dependent children, from purchasing publicly traded stocks.

In a 232–198 vote on Wednesday, the House approved the Stop Insider Trading Act, advancing the legislation to the Senate for consideration. Representative Bryan Steil of Wisconsin, who introduced the bill, said the measure “ensures no lawmaker can profit off of insider information” and “institutes strict penalties for any violation.”

“We have not previously had a bill on the House floor that provides this opportunity,” Steil said during Wednesday’s House session before outlining the penalties included in the legislation.

“A fine equal to $2,000 or 10% of the transaction, as well as a disgorgement of profits. Violators would be forfeiting any gain realized if they failed to comply with this legislation.”

Some Democrats argue that the bill does not go far enough to address potential conflicts of interest because lawmakers would still be allowed to retain and sell stocks they already own. According to Steil, the legislation would require members of Congress to give seven days’ notice before selling existing stock holdings, a measure intended to discourage insider trading.

“The bill has major loopholes,” Senator Elizabeth Warren said on Thursday. “Lawmakers would still be allowed to own and sell stocks, so it won’t solve the problem. It’s not going to fly in the Senate. Members of Congress should not own, buy, or sell stocks.”

The Stop Insider Trading Act was formally received by the US Senate on Thursday after clearing the House of Representatives.

Unlike the proposed Digital Asset Market Clarity Act, a crypto market structure bill currently under Senate consideration, Steil’s legislation applies only to members of Congress and does not extend investment restrictions to the president, vice president, or their families. Under the proposed CLARITY Act, all US public officials could be prohibited from issuing or sponsoring tokens until 2029.

Prediction Markets Bill Moves Forward for Congressional Review#

The House’s approval of the Stop Insider Trading Act followed Representative Bryan Steil’s introduction of a separate bill aimed at preventing members of Congress from trading on prediction market platforms such as Kalshi and Polymarket. In June, the Wisconsin lawmaker introduced the Stop Lawmakers from Predicting Act to prohibit certain public officials, along with their spouses and children, from “wagering on public policy issues and political outcomes.”

Prediction markets attracted widespread public attention after a soldier allegedly earned more than $400,000 by placing bets related to Venezuelan President Nicolás Maduro, who was removed by US forces in January. Donald Trump’s teleprompter operator also reportedly made more than $100,000 from Kalshi event contracts tied to words and phrases used in the president’s speeches.

Like the stock trading bill, the proposed prediction markets legislation would require violators to pay a $2,000 penalty or 10% of the value of any prohibited wagers placed on prediction market platforms, whichever is greater.