Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act

S.439 (118th Congress)

Retrieved on 2025-05-15

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S.58 (118th Congress) - Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act

Summary

The Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act, designated as bill S. 439, aims to enhance ethical standards by prohibiting Members of Congress and their spouses from engaging in trading specific financial instruments during their terms. This includes securities, commodities, and derivatives, while excluding diversified mutual funds, exchange-traded funds, U.S. Treasury securities, and income from primary occupations of spouses or dependents. Exceptions are established for transactions completed within 180 days of the bill's enactment and for holdings in qualified blind trusts.

To enforce these regulations, Members must submit annual written certifications of compliance to their respective ethics committees, with the certifications made publicly available online. Violations of this Act will lead to the return of any profits gained from prohibited trades to the U.S. Treasury, alongside potential fines levied by the ethics committees, which have the authority to create rules for implementation and extend compliance deadlines for good faith efforts.

Negative consequences include the imposition of civil fines after prior notification and an opportunity for a hearing. The rationale for any fines must also be published. Members retain the right to appeal against fines via a privileged motion in either house. The bill mandates that the Government Accountability Office conduct an audit of adherence to these new requirements within two years post-enactment, reporting the findings to the appropriate ethics committees.

Finally, several amendments to existing laws will clarify definitions and references for consistency with these provisions, ensuring that the ethical landscape governing Members of Congress aligns with the statutory changes introduced by the PELOSI Act.

Topics

businessjustice

Questions About This Bill

Will this bill stop my local Congress member from trading stocks while in office?

Yes, this bill is meant to stop your local Congress member from trading stocks while they are in office. It says that Members of Congress will not be allowed to buy or sell certain financial products, like stocks and securities. If they do, they could face penalties, like having to give up any profits they made or paying fines. So, under this bill, there would be rules that prevent them from trading stocks while they're serving in Congress.

What types of investments are still allowed for Congress members under this bill?

Under this bill, members of Congress cannot buy or sell specific types of investments called "covered financial instruments." This includes things like stocks, certain futures, and commodities. However, they are still allowed to have these types of investments if they are placed in something called a "qualified blind trust." This means that these investments are managed by someone else without the member of Congress knowing what is being bought or sold. This rule is to help prevent insider trading and to keep things fair.

How will this bill impact the way Congress members handle their finances?

This bill, called the “Preventing Elected Leaders from Owning Securities and Investments Act,” is meant to change how members of Congress handle their money. It will stop them from trading certain investments, like stocks and commodities, to prevent insider trading (which is when someone uses secret information to make money in investments).

Here are the key points:

  1. No Trading for Congress Members: Members of Congress won't be allowed to buy or sell certain financial investments, called "covered financial instruments," which includes things like stocks and commodities.

  2. Consequences: If a member breaks this rule, they will have to give any profits they made from the illegal trades back to the government, and they could also face fines.

  3. Regular Checks: Every year, members will have to prove that they are following these rules. The results of these checks will be made public, so everyone can see if their leaders are obeying the law.

  4. Oversight: There will be special committees that can enforce these rules and make sure everyone is compliant, and they have the power to fine those who don’t follow the rules.

In simple terms, this bill will make sure that members of Congress play fair when it comes to investing their money, to keep them from using their special positions to get richer unfairly.

What happens if a Congress member breaks this new rule?

If a member of Congress breaks the new rule about insider trading, there are a couple of things that could happen to them:

  1. Give Back Profits: They have to return any money they made from their illegal actions to the U.S. Treasury. This means they need to "disgorge" or give back their profits.

  2. Fines: They might also have to pay a fine, which is a kind of penalty. The group responsible for making sure everyone follows these rules, called the ethics committee, can decide how much the fine will be.

So, if they don't follow the rule, they could lose money they made from it and have to pay extra money as a punishment.

Can Congress members appeal if they get fined for violating this bill?

Yes, if a member of Congress gets fined for breaking the rules in this bill, they can appeal. This means they have the right to ask for a vote by all members of the Senate or House of Representatives to reconsider the fine.

How often do Congress members have to prove they are following this bill?

Members of Congress have to prove they are following this bill at least once a year. They must submit a written certification to the ethics committee that shows they are following the rules about financial investments. This information will be published on a public website so everyone can see it.

What is a qualified blind trust and how does it work under this bill?

A qualified blind trust is a special type of investment account that Members of Congress can use to handle their money without knowing exactly what’s being bought or sold. Under this bill, if a Member of Congress puts their investments into a qualified blind trust, they don’t have to worry about making decisions based on insider information (like secret information that could help them make more money). Instead, an independent person manages the trust, which keeps investments separate from the Member's knowledge about how they might affect the country or their job. This helps to avoid any unfair advantages in money-making while they are working in Congress.

How will the public know if a Congress member is following the rules?

The public will know if a Congress member is following the rules about trading stocks by checking online. Each year, Congress members have to write and submit a statement saying they are following these rules. This information will be published on a website that everyone can see. Also, if a member breaks these rules, the ethics committee will put information about any fines they receive on a public website too, so people can see what happened. This way, the public can keep an eye on Congress members and make sure they are being fair.

What does the Government Accountability Office do regarding this bill?

The Government Accountability Office (GAO) will check to make sure that Members of Congress are following the rules set by this bill. This includes looking at whether they are buying or selling certain financial instruments, which they are not allowed to do under the law. The GAO has to do this audit within two years after the bill becomes a law and then send a report to the ethics committees about what they found. This is a way to help keep the Members of Congress honest and ensure they are not using their positions to make money in ways that aren't allowed.