S. 3649: Restore Trust in Congress Act

This bill, known as the "Restore Trust in Congress Act," aims to establish restrictions on stock ownership and trading for Members of Congress and their immediate family members. Here’s a summary of its key provisions:

Prohibition on Stock Trading

The bill would prohibit covered individuals—defined as Members of Congress, their spouses, and dependent children—from owning or trading certain types of investments, specifically:

• Securities
• Commodities
• Futures
• Any similar financial instruments acquired through synthetic means (like options or warrants)

However, the bill does not apply to specific types of investments, such as:

• U.S. Treasury securities
• State and municipal government bonds
• Widely held diversified investment funds
• Small business interests and certain real estate investments

Divestment Requirements

Individuals who currently hold prohibited investments would be required to divest those investments by certain deadlines:

• 180 days for those who are covered individuals at the time the law is enacted
• 90 days for those who become covered individuals after the enactment

The divestment must be made at fair market value.

Exceptions and Exemptions

There are some exceptions where trading certain covered investments is still allowed:

• Spouses or dependent children can trade covered investments if they do not belong to a covered individual and if the trading is part of their primary occupation.
• Investments held in certain trusts may have exemptions, provided specific conditions are met.
• If a covered individual acquires a covered investment due to special circumstances (like inheritance or divorce), they must divest within 90 days.

Certificates and Guidance

A certificate of divestiture can be issued by supervising ethics offices to assist covered individuals in complying with the divestment requirement while addressing tax implications. The ethics office is also tasked with providing interpretive guidance on terms and compliance matters.

Penalties for Non-Compliance

Covered individuals who violate these prohibitions would face penalties, including:

• A financial penalty equal to 10% of the value of the covered investment.
• Required to surrender any profits gained from transactions that violate the rules.

These penalties cannot be paid using official congressional funds.

Public Reporting

Supervising ethics offices would be required to publicly disclose information about any fines imposed, including reasons for and outcomes of those fines.

Effective Date and Implementation

The bill sets clear timelines for when these regulations would take effect and lays out the process for enforcement and compliance.

Relevant Companies

None found