These lawmakers made a fortune in the stock market last year

Federal government employees who own stock in a company are prohibited by law from being involved in any matter that may impact the financial interests of the company — whether or not the matter can plausibly impact the stock price. The restriction also applies to any stock owned by a spouse or minor child of the federal employee. Each violation of the law carries a maximum penalty of five years in jail and a fine of $50,000.

Members of Congress are constantly involved in matters that directly impact the financial performance of all publicly traded companies — casting votes that determine tax rates, regulations, funds available for government contracts, and a myriad of other issues. Yet, under the law, members of Congress are not considered employees of the federal government. They are free to actively trade any stock with few restrictions.

The only prohibition that applies to members of Congress is a ban on stock trading based on "insider information." It is very difficult, however, to prove why any person traded a stock. No member of Congress has ever been prosecuted for insider trading.

In 2024, more than 100 members of Congress actively traded individual stocks. Many of them cleaned up, with gains that far outpaced the broader market. According to a new report by Unusual Whales, a data platform for retail traders, 13 members of Congress who own at least five stocks — 8 Republicans and 5 Democrats — saw their portfolios gain 60% or more for the year.

Not all the biggest winners trade actively. Congressman David Rouzer (R-NC) saw the largest increase (149%), but most of the gain was due to Nvidia, Mastercard, and Visa stock he bought years earlier. But others who saw significant gains, including Senator Ron Wyden (D-OR), Congresswoman Nancy Pelosi (D-CA), and Congressman Dan Crenshaw (R-TX) trade frequently.

Overall, both Democrats and Republicans saw gains that exceeded the return of the S&P 500 in 2024. On average, Democratic portfolios increased 31% and Republican portfolios increased 26.1%, while the S&P 500 increased 24.9%.

The members of Congress with the best stock performance generally invested in major tech stocks, which saw a sharp price increase in 2024. Throughout the year, Congress approved several bills, including a ban on TikTok and the CHIPs Act, that enhanced the value of those stocks. Congressman Michael McCaul (R-TX), the author of the bill to ban TikTok, owns hundreds of thousands of dollars of stock in Meta, one of TikTok's chief rivals. Senator Markwayne Mullin (R-OK) bought up to $50,000 worth of Meta stock last January before voting to ban TikTok in April.

Members of Congress are required to report only broad ranges for their stock purchases or sales (e.g., $1,000 to $15,000, $50,001 to $100,000). The law requires these reports to be filed within 45 days of a trade, although many members take much longer and pay a nominal fine or receive no punishment at all.

In August, Congresswoman Debbie Wasserman Schultz (D-FL) bought shares in Hecla Mining. The Unusual Whales report notes that Wasserman Schultz "sits on the Environment, Manufacturing, and Critical Minerals Sub Committee." Hecla Mining made appeals directly to the subcommittee and was mentioned in the subcommittee's minutes.

The situation is likely to get worse in the new Congress. Congress will consider a host of legislation that will directly impact stock prices, including a massive tax bill, tariffs, immigration restrictions, and budget cuts. Further, the House and Senate are closely divided, and, in most cases, one or two members will have the power to sink any bill. Members of Congress will not only have advance insight into the fate of legislative provisions that could give them an edge in the stock market but, in many cases, the power to demand the inclusion or exclusion of provisions that would benefit their existing holdings.

When pressed, members of Congress insist that their stock trades are unconnected to their day job. Pressed on his purchase of Meta stock during an appearance on CNBC last year, Mullin claimed that he did not know what stock he owned because it was handled by "third-party people." (It is unclear what this means, as Mullin has not placed his stock in a qualified blind trust, which would cede control of his stock holdings to a third party.)

There may be innocent explanations for many conveniently timed Congressional stock trades. But most trades are never explained. And relying on members of Congress to explain why a particular trade is not inappropriate misses the point of conflict of interest laws. The purpose is to avoid not just actual corruption but the perception of corruption.

To address both of these issues, there is renewed bipartisan interest in legislation banning members of Congress from trading individual stocks.

The push for reform

On January 9, a group of lawmakers introduced the Bipartisan Restoring Faith in Government Act, which would ban members of Congress, as well as their spouses and dependents, from owning or trading individual stocks. The legislation was introduced by Representatives Brian Fitzpatrick (R-PA), Alexandria Ocasio-Cortez (D-NY), Cory Mills (R-FL), and Raja Krishnamoorthi (D-IL).

The bill gives legislators 90 days after the law is passed to divest their investments. Lawmakers would also be required to get approval before placing investments into a qualified blind trust. The penalty for failing to comply with the law includes a fine of up to $50,000. Other similar bills have also been introduced in the House.

Last July, Senators Jeff Merkley (D-OR), Gary Peters (D-MI), Jon Ossoff (D-GA), and Josh Hawley (R-MO) also announced a new version of a bill, the Ending Trading and Holdings In Congressional Stocks (ETHICS) Act, that would ban Members of Congress, their spouses, dependent children, the president, and the vice president from trading and owning individual stocks and other investments.

The legislation would immediately prohibit lawmakers from buying individual stocks, and ban selling stocks after 90 days. Starting in 2027, lawmakers, spouses, and dependents would also be required to divest from individual assets. The legislation includes a penalty of a lawmakers’ monthly salary or “10 percent of the value of each covered investment that was not divested,” whichever is greater. The legislation was passed by the U.S. Senate Homeland Security and Governmental Affairs Committee last July, becoming the first legislation aimed at banning stock trading for members of Congress to pass a Senate committee.

But passing legislation banning lawmakers from participating in stock trading is still an uphill battle. According to Roll Call, “[a]t least a dozen” similar proposals have been introduced in the past few years, but have failed to gain the necessary traction.

Some members of Congress have openly opposed similar legislation. In November, Congressman Crenshaw was asked on a podcast with The Free Press if he supported a ban on members of Congress trading stocks. Crenshaw said it was “number 1,000 on my priority list of things to care about.” Crenshaw continued on to say, “So sure, why not? Don’t let us trade stocks. We’ll just keep whipping ourselves. How about we don’t make any money either? Let’s just cut our paycheck. We haven’t got a pay raise since 2008.” Crenshaw claimed he had “about $20,000” in the stock market, and denied having any meaningful non-public information, saying that people would be “more surprised by how little information we have.”

Other members of Congress, including Senator Tommy Tuberville (R-AL), opposed similar legislation banning lawmakers from trading stocks in 2022. At the time, Tuberville called it “ridiculous.” In a December 2024 interview with Alabama Daily News, Tuberville said he doesn’t “understand what’s the big deal” about members of Congress participating in stock trading, arguing that he doesn’t “get anything up here that gives me an opportunity to make money on stocks any more than anybody.”