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

S.1498 (119th Congress)

Retrieved on 2025-12-19

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HR.3388 (119th Congress) - Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act

Summary

Bill S. 1498, known as the Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act, aims to amend existing laws to restrict Members of Congress from engaging in financial transactions related to specific financial instruments. The primary intention behind this legislation is to enhance ethical standards and transparency regarding the financial dealings of elected officials, ensuring they are not influenced by potential personal financial gain from their legislative duties. The bill outlines specific definitions for 'covered financial instruments,' tightening regulations on investments in securities and derivatives that Members of Congress might otherwise exploit due to access to non-public information.

The bill establishes clear prohibitions against Members and their spouses from trading certain financial instruments while in office, although it includes exceptions to allow current members a 180-day window to divest from these holdings upon the bill's enactment. New Members of Congress will similarly face a 180-day waiting period before engaging in these financial activities after beginning their terms. To enforce these regulations, the bill introduces strict penalties for violations, including financial restitution to the U.S. Treasury for profited breaches and civil fines assessed by ethics committees.

Accountability measures are reinforced through annual certification requirements for compliance, which must be publicly posted online, and the bill grants ethics committees the authority to enforce compliance and potentially extend deadlines for divesting assets when members demonstrate earnest efforts to comply. Additional provisions mandate guidance on covered financial instruments, public access to compliance information, and structured assessment of fines for ongoing noncompliance, emphasizing transparency about the enforcement of the new rules. The bill also outlines mechanisms for appealing fines and mandates audits to monitor adherence to the new regulations within two years of its enactment. Lastly, the bill includes amendments to the Lobbying Disclosure Act for clearer definitions of legislative employees, aiming to streamline compliance and enhance transparency in lobbying activities related to congressional finance.

Topics

businessfinancejusticenational security

Questions About This Bill

What types of investments will Congress members not be able to trade while in office?

Members of Congress will not be able to trade certain types of investments while they are in office. These include:

  1. Securities: This means stocks, which are pieces of companies that people can buy.
  2. Security futures: This refers to contracts that let people bet on the future price of those stocks or other securities.

The goal of this law is to prevent Congress members from using insider information to make money from these investments while they are making decisions that could affect the value of those investments.

How long do current Congress members have to sell their investments after this bill is passed?

The sections of the bill provided do not say how long current Congress members have to sell their investments after the bill is passed. Therefore, I can't answer the question confidently.

Are members of Congress allowed to keep some of their investments even after this bill is enacted?

No, members of Congress are not allowed to keep certain investments after this bill is enacted. The bill is designed to stop them from owning investments like stocks and securities that could lead to insider trading. If they already have these investments, they will be required to get rid of them. If they don't follow these rules, they could face penalties.

What happens if a member of Congress breaks the rules in this bill?

If a member of Congress breaks the rules in this bill, they could face fines or be required to give back any money they made from the wrongful transactions. Here’s how it works:

  1. Fines: If a member of Congress does something wrong, the ethics committee will send them a notice and tell them what they did wrong. If they don’t fix the issue within 30 days, they will have to pay a fine that is 10% of the value of the illegal transaction for each time the issue continues.

  2. Disgorgement: This means that if they made any profit from the bad actions, they have to give that money back to the government.

  3. Transparency: The ethics committee will keep track of the fines and make that information public, so everyone can see what happened.

In summary, breaking the rules could cost members of Congress money and they have to return any illegal profits.

How will this bill make it easier to know if Congress members are following the rules?

This bill, called the "PELOSI Act," aims to make sure that Congress members follow the rules about their investments. It does this in a few ways:

  1. Bans Insider Trading: It makes it illegal for Congress members to buy or sell certain investments based on secret information they might have from their jobs.

  2. Regular Checks: Each year, Congress members have to write a report saying they are following the rules about their investments. These reports will be published online so everyone can see them.

  3. Fines for Breaking Rules: If a Congress member breaks the rules, there can be money penalties, and these fines will also be made public. This means that if they don't follow the rules, people will know about it.

  4. Audits: After two years, an independent group will check to see if Congress members are following the rules and report the results.

Overall, this bill helps everyone know if Congress members are playing fair with their investments by having regular checks, making rules public, and punishing those who break them.

Will my local Congress member have to publicly report their financial dealings each year?

Yes, your local Congress member will have to publicly report their financial dealings each year. The bill says that every Member of Congress must submit a written certification to the supervising ethics committee to show that they are following the rules about their financial investments. This certification will be published on a website that everyone can see. So, people will be able to check if their Congress members are following the rules.

What is the period before newly elected Congress members can start trading their investments?

Newly elected members of Congress have to wait 180 days, or about six months, before they can start trading their investments. This rule is meant to prevent them from using insider information for personal gain right after they take office.

How will this bill affect the way lobbyists interact with Congress members regarding finances?

This bill aims to change how lobbyists and members of Congress deal with money matters. Specifically, it prohibits members of Congress from trading certain financial assets, which is often called "insider trading." This means that they cannot use secret or privileged information they get from their positions to make money in the stock market or other financial markets.

The bill also contains rules for punishing members of Congress if they break these rules. They could face fines or be required to give up any profits made from illegal trades. Plus, they need to prove that they are following these rules by submitting reports regularly. This will make it harder for lobbyists to influence Congress members in ways that could create conflicts of interest or lead to unfair financial gains.

In simple terms, the bill is trying to make sure that Congress members can't make money from special information they might get from lobbyists, keeping things fairer and more transparent.