S. 1803: Stop Trading Assets Benefitting Lawmakers' Earnings while Governing Exotic and Novel Investments in the United States Act

This bill, titled the "Stop Trading Assets Benefitting Lawmakers' Earnings while Governing Exotic and Novel Investments in the United States Act" or the "STABLE GENIUS Act," aims to regulate the financial transactions of certain public officials, particularly during their time in office or when they are candidates for office. Below are the key points of the bill:

Definitions

• Covered Elections: Refers to elections for top government positions, including President, Vice President, U.S. Senators, U.S. Representatives, Delegates to Congress, and the Resident Commissioner of Puerto Rico.
• Covered Individuals: Includes the President, Vice President, U.S. Senators, U.S. Representatives, Delegates to Congress, Resident Commissioners, and candidates in a covered election.
• Covered Investments: Specifically refers to any digital asset.
• Digital Asset: Defined as any digital representation of value recorded on a secured distributed ledger or similar technology.

Prohibited Financial Transactions

Covered individuals are prohibited from engaging in any of the following actions:

• Issuing, sponsoring, or endorsing a covered investment.
• Purchasing, selling, or holding a covered investment.
• Obtaining a covered investment through derivatives or similar financial instruments.
• Acquiring interests in covered investments through mutual funds or exchange-traded funds.

Time Frame for Prohibition

The prohibitions on financial transactions are effective during:

• The period starting when an individual files as a candidate for a covered election until the election date.
• The entire term of service for the covered individual.
• A one-year period following the end of the covered individual’s service.

Blind Trusts

To comply with these restrictions, covered individuals must transfer their covered investments into a qualified blind trust. Key requirements for these trusts include:

• The trust must be approved by the supervising ethics office.
• The trustee must divest of the assets within six months of the trust's establishment.
• The trustee cannot have a close personal or business relationship with the covered individual.

Reporting Requirements

Each supervising ethics office is required to publish the qualified blind trust agreements of covered individuals on their public websites.

Liability and Penalties

The bill includes provisions for both civil and criminal penalties for violations:

• If a covered individual violates the transaction prohibitions, the Attorney General can pursue civil action, which may result in penalties up to $250,000 and the requirement to return any profits made from the unlawful activity to the U.S. Treasury.
• Criminal violations can lead to fines and imprisonment for up to 18 years if the violation results in significant financial loss or personal gain through illegal transactions.

Relevant Companies

• None found