A movement aiming to prohibit members of Congress from engaging in stock trading is gaining traction following revelations that lawmakers made trades exceeding $1 billion last year, with many significantly outperforming the market.

Critics have condemned lawmakers' trading activities, labeling them as "gangster" tactics and calling for legislation to bar members of Congress and their immediate family members from owning or trading stocks.

Should Congress be allowed to play the stock market? Campaign to ban lawmakers from trading heats up as it's revealed they made $1 BILLION of deals last year and raked in huge returns of up to 239% https://t.co/P5e2ottlq3 pic.twitter.com/FoVfiMzxvK

— Daily Mail Online (@MailOnline) March 17, 2024

The ETHICS Act

The proposed legislation, known as the ETHICS Act (Ending Trading and Holdings in Congressional Stocks), has garnered support from several lawmakers but requires additional backing to advance further.

The momentum to curb stock trading among top American politicians surged after disclosures revealed substantial gains made by some lawmakers in the stock market last year.

Notable among the traders is former House Speaker Nancy Pelosi, who reportedly engaged in trades totaling approximately $100 million since 2019, with returns soaring to around 65 percent last year, significantly surpassing the broader market.

Democratic Rep. Brian Higgins of New York emerged as one of Congress's top performers, boasting returns of 238 percent on his investments in 2020 alone. Meanwhile, Republican Rep. Mark Green, chair of the Homeland Security Committee, realized gains of 122.2 percent.

A massive return on investments

Additional studies revealed that stocks selected by members of Congress yielded returns of approximately 273 percent since April 2020. Despite these lucrative gains, none of the lawmakers face accusations of illegal activity.

In response to these findings, Unusual Whales, a trading community, teamed up with RepresentUs, an anti-corruption organization, to spearhead a renewed campaign against congressional stock trading.

They advocate for a complete ban on lawmakers owning or trading stocks to prevent conflicts of interest and the potential misuse of insider information.

Polls support the ban

Polls indicate strong public support, with 70 percent of Americans favoring a ban on lawmakers' stock trading. Many politicians from both parties have signaled their backing for such a ban, although concrete legislation has yet to be enacted.

Pelosi, among others, previously voiced support for a ban but emphasized the need for a comprehensive, government-wide approach.

Presently, lawmakers are subject to the 2012 STOCK Act, which prohibits the use of non-public information obtained from official duties for personal financial gain. Violations of the act often incur nominal fines, raising concerns about its effectiveness in deterring misconduct.

The legislation continues to move forward though it is uncertain whether lawmakers will vote to end a move that has led to significant self-gain for members in both parties.