H.R. 3388: Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act

This bill, known as the Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act, aims to amend existing law to prohibit certain financial transactions by Members of Congress and their spouses while they are in office. The key provisions of the bill are as follows:

Short Title

The bill is referred to as the Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act.

Banning Insider Trading in Congress

Definitions

The bill introduces the term "covered financial instrument," which includes:

• Securities, such as stocks and bonds.
• Securities futures.
• Commodities.
• Similar economic interests acquired through derivatives, options, or similar means.

However, certain items are excluded from this definition, including:

• Diversified mutual funds.
• Diversified exchange-traded funds.
• U.S. Treasury securities.
• Income from the primary occupation of a spouse or dependent child of a Member of Congress.

Prohibition on Transactions

The bill prohibits Members of Congress and their spouses from holding, purchasing, or selling covered financial instruments during their term of service. Members who are currently serving will have a 180-day period following the enactment of the bill to divest their holdings.

Penalties for Violations

• If a Member of Congress conducts a prohibited transaction, they must forfeit any profits made from that transaction to the U.S. Treasury.
• Members may also face civil fines administered by their respective ethics committee if they violate the transaction prohibitions.

Certification of Compliance

Members of Congress are required to submit written certifications to their supervising ethics committees at least once a year, verifying their compliance with the new rules regarding financial transactions.

The supervising ethics committees are responsible for publishing these certifications on public websites.

Authority of Supervising Ethics Committees

The supervising ethics committees can enforce compliance with the act through the creation of rules, guidance on covered financial instruments, and by assessing civil fines for violations. They can also publish details about each fine and the rationale behind it.

Audit by Government Accountability Office

Within two years of the enactment of this legislation, the Government Accountability Office (GAO) is required to audit compliance by Members of Congress with this act and to report the findings to the supervising ethics committees.

Relevant Companies

None found.